Here's What We Like About Syarikat Takaful Malaysia Keluarga Berhad's (KLSE:TAKAFUL) Upcoming Dividend

Readers hoping to buy Syarikat Takaful Malaysia Keluarga Berhad (KLSE:TAKAFUL) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Investors can purchase shares before the 7th of January in order to be eligible for this dividend, which will be paid on the 29th of January.

Syarikat Takaful Malaysia Keluarga Berhad's next dividend payment will be RM0.12 per share, on the back of last year when the company paid a total of RM0.12 to shareholders. Based on the last year's worth of payments, Syarikat Takaful Malaysia Keluarga Berhad has a trailing yield of 2.5% on the current stock price of MYR4.84. If you buy this business for its dividend, you should have an idea of whether Syarikat Takaful Malaysia Keluarga Berhad's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.

View our latest analysis for Syarikat Takaful Malaysia Keluarga Berhad

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately Syarikat Takaful Malaysia Keluarga Berhad's payout ratio is modest, at just 30% of profit.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

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

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings fall far enough, the company could be forced to cut its dividend. For this reason, we're glad to see Syarikat Takaful Malaysia Keluarga Berhad's earnings per share have risen 19% per annum over the last five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Syarikat Takaful Malaysia Keluarga Berhad has lifted its dividend by approximately 16% a year on average. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

To Sum It Up

Has Syarikat Takaful Malaysia Keluarga Berhad got what it takes to maintain its dividend payments? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. In summary, Syarikat Takaful Malaysia Keluarga Berhad appears to have some promise as a dividend stock, and we'd suggest taking a closer look at it.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example, we've found 2 warning signs for Syarikat Takaful Malaysia Keluarga Berhad (1 is a bit concerning!) that deserve your attention before investing in the shares.

If you're in the market for dividend stocks, we recommend checking our list of top dividend stocks with a greater than 2% yield and an upcoming dividend.

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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.
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