LBS Bina Group Berhad (KLSE:LBS) Is Paying Out A Dividend Of MYR0.0135

The board of LBS Bina Group Berhad (KLSE:LBS) has announced that it will pay a dividend on the 16th of July, with investors receiving MYR0.0135 per share. This means the dividend yield will be fairly typical at 3.2%.

See our latest analysis for LBS Bina Group Berhad

LBS Bina Group Berhad's Payment Has Solid Earnings Coverage

We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. However, prior to this announcement, LBS Bina Group Berhad's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 20.9% over the next year. If the dividend continues on this path, the payout ratio could be 29% by next year, which we think can be pretty sustainable going forward.

Dividend Volatility

The company's dividend history has been marked by instability, with at least one cut in the last 10 years. The annual payment during the last 10 years was MYR0.0136 in 2014, and the most recent fiscal year payment was MYR0.027. This implies that the company grew its distributions at a yearly rate of about 7.1% over that duration. A reasonable rate of dividend growth is good to see, but we're wary that the dividend history is not as solid as we'd like, having been cut at least once.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. We are encouraged to see that LBS Bina Group Berhad has grown earnings per share at 10% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for LBS Bina Group Berhad's prospects of growing its dividend payments in the future.

LBS Bina Group Berhad Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think LBS Bina Group Berhad might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. As an example, we've identified 1 warning sign for LBS Bina Group Berhad that you should be aware of before investing. If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks.

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