Three-A Resources Berhad's (KLSE:3A) Dividend Will Be Increased To MYR0.016

Three-A Resources Berhad (KLSE:3A) will increase its dividend on the 31st of December to MYR0.016, which is 100% higher than last year's payment from the same period of MYR0.008. This will take the dividend yield to an attractive 4.0%, providing a nice boost to shareholder returns.

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Three-A Resources Berhad's Projected Earnings Seem Likely To Cover Future Distributions

Impressive dividend yields are good, but this doesn't matter much if the payments can't be sustained. Based on the last payment, Three-A Resources Berhad was quite comfortably earning enough to cover the dividend. This means that a large portion of its earnings are being retained to grow the business.

Over the next year, EPS could expand by 6.4% if recent trends continue. Assuming the dividend continues along recent trends, we think the payout ratio could be 44% by next year, which is in a pretty sustainable range.

Check out our latest analysis for Three-A Resources Berhad

Three-A Resources Berhad Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was MYR0.0112 in 2015, and the most recent fiscal year payment was MYR0.028. This implies that the company grew its distributions at a yearly rate of about 9.6% over that duration. 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. We are encouraged to see that Three-A Resources Berhad has grown earnings per share at 6.4% per year over the past five years. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.

Three-A Resources Berhad Looks Like A Great Dividend Stock

Overall, a dividend increase is always good, and we think that Three-A Resources Berhad is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Three-A Resources Berhad that investors should know about before committing capital to this stock. Is Three-A Resources Berhad not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.

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