Y.S.P. Southeast Asia Holding Berhad's (KLSE:YSPSAH) Dividend Will Be Increased To MYR0.11

Y.S.P. Southeast Asia Holding Berhad's (KLSE:YSPSAH) periodic dividend will be increasing on the 22nd of July to MYR0.11, with investors receiving 10.0% more than last year's MYR0.10. This makes the dividend yield 4.0%, which is above the industry average.

See our latest analysis for Y.S.P. Southeast Asia Holding Berhad

Y.S.P. Southeast Asia Holding Berhad's Earnings Easily Cover The Distributions

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. Y.S.P. Southeast Asia Holding Berhad is quite easily earning enough to cover the dividend, however it is being let down by weak cash flows. With the company not bringing in any cash, paying out to shareholders is bound to become difficult at some point.

Looking forward, earnings per share could rise by 3.6% over the next year if the trend from the last few years continues. Assuming the dividend continues along recent trends, we think the payout ratio could be 41% by next year, which is in a pretty sustainable range.

Y.S.P. Southeast Asia Holding Berhad Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2014, the dividend has gone from MYR0.065 total annually to MYR0.10. This means that it has been growing its distributions at 4.4% per annum over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.

Dividend Growth May Be Hard To Achieve

Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Earnings per share has been crawling upwards at 3.6% per year. If Y.S.P. Southeast Asia Holding Berhad is struggling to find viable investments, it always has the option to increase its payout ratio to pay more to shareholders.

In Summary

Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. With cash flows lacking, it is difficult to see how the company can sustain a dividend payment. We would be a touch cautious of relying on this stock primarily for the dividend income.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 2 warning signs for Y.S.P. Southeast Asia Holding Berhad that investors should know about before committing capital to this stock. Is Y.S.P. Southeast Asia Holding 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.