Hap Seng Plantations Holdings Berhad (KLSE:HSPLANT) Stock Goes Ex-Dividend In Just Four Days

Hap Seng Plantations Holdings Berhad (KLSE:HSPLANT) stock is about to trade ex-dividend in 4 days. You will need to purchase shares before the 10th of March to receive the dividend, which will be paid on the 24th of March.

Hap Seng Plantations Holdings Berhad's next dividend payment will be RM0.055 per share, on the back of last year when the company paid a total of RM0.07 to shareholders. Calculating the last year's worth of payments shows that Hap Seng Plantations Holdings Berhad has a trailing yield of 3.7% on the current share price of MYR1.87. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. As a result, readers should always check whether Hap Seng Plantations Holdings Berhad has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Hap Seng Plantations Holdings Berhad

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Hap Seng Plantations Holdings Berhad paid out more than half (62%) of its earnings last year, which is a regular payout ratio for most companies. That said, even highly profitable companies sometimes might not generate enough cash to pay the dividend, which is why we should always check if the dividend is covered by cash flow. It distributed 34% of its free cash flow as dividends, a comfortable payout level for most companies.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Stocks with flat earnings can still be attractive dividend payers, but it is important to be more conservative with your approach and demand a greater margin for safety when it comes to dividend sustainability. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're not enthused to see that Hap Seng Plantations Holdings Berhad's earnings per share have remained effectively flat over the past five years. We'd take that over an earnings decline any day, but in the long run, the best dividend stocks all grow their earnings per share.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Hap Seng Plantations Holdings Berhad has seen its dividend decline 2.5% per annum on average over the past 10 years, which is not great to see.

Final Takeaway

From a dividend perspective, should investors buy or avoid Hap Seng Plantations Holdings Berhad? The payout ratios appear reasonably conservative, which implies the dividend may be somewhat sustainable. Still, with earnings basically flat, Hap Seng Plantations Holdings Berhad doesn't stand out from a dividend perspective. All things considered, we are not particularly enthused about Hap Seng Plantations Holdings Berhad from a dividend perspective.

If you're not too concerned about Hap Seng Plantations Holdings Berhad's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. For example, Hap Seng Plantations Holdings Berhad has 2 warning signs (and 1 which is a bit unpleasant) we think you should know about.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

If you’re looking to trade Hap Seng Plantations Holdings Berhad, open an account with the lowest-cost* platform trusted by professionals, Interactive Brokers. Their clients from over 200 countries and territories trade stocks, options, futures, forex, bonds and funds worldwide from a single integrated account. Promoted

This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
^*Interactive Brokers Rated Lowest Cost Broker by StockBrokers.com Annual Online Review 2020

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.