Three-A Resources Berhad (KLSE:3A) Has Announced A Dividend Of MYR0.01

Three-A Resources Berhad's (KLSE:3A) investors are due to receive a payment of MYR0.01 per share on 26th of June. The dividend yield will be 3.7% based on this payment which is still above the industry average.

Our free stock report includes 1 warning sign investors should be aware of before investing in Three-A Resources Berhad. Read for free now.

Three-A Resources Berhad's Future Dividend Projections Appear Well Covered By Earnings

While it is great to have a strong dividend yield, we should also consider whether the payment is sustainable. However, prior to this announcement, Three-A Resources Berhad's dividend was comfortably covered by both cash flow and earnings. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS could expand by 6.0% if recent trends continue. If the dividend continues on this path, the payout ratio could be 34% by next year, which we think can be pretty sustainable going forward.

See our latest analysis for Three-A Resources Berhad

Three-A Resources Berhad Has A Solid Track Record

The company has an extended history of paying stable dividends. The dividend has gone from an annual total of MYR0.0112 in 2015 to the most recent total annual payment of MYR0.028. This means that it has been growing its distributions at 9.6% per annum over that time. The dividend has been growing very nicely for a number of years, and has given its shareholders some nice income in their portfolios.

Three-A Resources Berhad Could Grow Its Dividend

The company's investors will be pleased to have been receiving dividend income for some time. It's encouraging to see that Three-A Resources Berhad has been growing its earnings per share at 6.0% a year over the past five years. Growth in EPS bodes well for the dividend, as does the low payout ratio that the company is currently reporting.

Three-A Resources Berhad Looks Like A Great Dividend Stock

Overall, we think that this is a great income investment, and we think that maintaining the dividend this year may have been a conservative choice. Earnings are easily covering distributions, and the company is generating plenty of cash. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 1 warning sign for Three-A Resources Berhad that investors need to be conscious of moving forward. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.

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