Is It Worth Considering Syarikat Takaful Malaysia Keluarga Berhad (KLSE:TAKAFUL) For Its 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. The ex-dividend date is usually set to be two business days before the record date, which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Therefore, if you purchase Syarikat Takaful Malaysia Keluarga Berhad's shares on or after the 12th of December, you won't be eligible to receive the dividend, when it is paid on the 15th of January.

The company's next dividend payment will be RM00.185 per share. Last year, in total, the company distributed RM0.17 to shareholders. Calculating the last year's worth of payments shows that Syarikat Takaful Malaysia Keluarga Berhad has a trailing yield of 5.0% on the current share price of RM03.37. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. We need to see whether the dividend is covered by earnings and if it's growing.

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If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Check out our latest analysis for Syarikat Takaful Malaysia Keluarga Berhad

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

Have Earnings And Dividends Been Growing?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If earnings fall far enough, the company could be forced to cut its dividend. It's not encouraging to see that Syarikat Takaful Malaysia Keluarga Berhad's earnings are effectively flat over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Syarikat Takaful Malaysia Keluarga Berhad has delivered 1.3% dividend growth per year on average over the past 10 years.

To Sum It Up

Is Syarikat Takaful Malaysia Keluarga Berhad an attractive dividend stock, or better left on the shelf? Syarikat Takaful Malaysia Keluarga Berhad's earnings per share are basically flat over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. It doesn't appear an outstanding opportunity, but could be worth a closer look.

If you're not too concerned about Syarikat Takaful Malaysia Keluarga Berhad's ability to pay dividends, you should still be mindful of some of the other risks that this business faces. For example, we've found 1 warning sign for Syarikat Takaful Malaysia Keluarga Berhad that we recommend you consider before investing in the business.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.