Rhone Ma Holdings Berhad (KLSE:RHONEMA) Will Pay A Dividend Of MYR0.01

Rhone Ma Holdings Berhad's (KLSE:RHONEMA) investors are due to receive a payment of MYR0.01 per share on 15th of July. This means the dividend yield will be fairly typical at 2.9%.

See our latest analysis for Rhone Ma Holdings Berhad

Rhone Ma Holdings Berhad's Earnings Easily Cover The Distributions

While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. However, Rhone Ma Holdings Berhad's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

The next year is set to see EPS grow by 18.6%. If the dividend continues on this path, the payout ratio could be 26% by next year, which we think can be pretty sustainable going forward.

Rhone Ma Holdings Berhad's Dividend Has Lacked Consistency

Looking back, Rhone Ma Holdings Berhad's dividend hasn't been particularly consistent. This makes us cautious about the consistency of the dividend over a full economic cycle. The annual payment during the last 7 years was MYR0.0364 in 2017, and the most recent fiscal year payment was MYR0.02. This works out to be a decline of approximately 8.2% per year over that time. A company that decreases its dividend over time generally isn't what we are looking for.

Rhone Ma Holdings Berhad May Find It Hard To Grow The Dividend

With a relatively unstable dividend, and a poor history of shrinking dividends, it's even more important to see if EPS is growing. Earnings has been rising at 2.0% per annum over the last five years, which admittedly is a bit slow. If Rhone Ma Holdings Berhad is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.

Our Thoughts On Rhone Ma Holdings Berhad's Dividend

Overall, a consistent dividend is a good thing, and we think that Rhone Ma Holdings Berhad has the ability to continue this into the future. The dividend has been at reasonable levels historically, but that hasn't translated into a consistent payment. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 2 warning signs for Rhone Ma Holdings Berhad that investors should take into consideration. Is Rhone Ma Holdings Berhad not quite the opportunity you were looking for? Why not check out 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.

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