Four Days Left To Buy Menang Corporation (M) Berhad (KLSE:MENANG) Before The Ex-Dividend Date

Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see Menang Corporation (M) Berhad (KLSE:MENANG) is about to trade ex-dividend in the next four days. 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. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Accordingly, Menang Corporation (M) Berhad investors that purchase the stock on or after the 3rd of December will not receive the dividend, which will be paid on the 23rd of December.

The company's next dividend payment will be RM00.01 per share. Last year, in total, the company distributed RM0.04 to shareholders. Looking at the last 12 months of distributions, Menang Corporation (M) Berhad has a trailing yield of approximately 6.2% on its current stock price of RM00.65. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! As a result, readers should always check whether Menang Corporation (M) Berhad has been able to grow its dividends, or if the dividend might be cut.

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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. Menang Corporation (M) Berhad paid out 96% of its earnings, which is more than we're comfortable with, unless there are mitigating circumstances. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. What's good is that dividends were well covered by free cash flow, with the company paying out 16% of its cash flow last year.

It's good to see that while Menang Corporation (M) Berhad's dividends were not well covered by profits, at least they are affordable from a cash perspective. Still, if the company continues paying out such a high percentage of its profits, the dividend could be at risk if business turns sour.

Check out our latest analysis for Menang Corporation (M) Berhad

Click here to see how much of its profit Menang Corporation (M) Berhad paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's comforting to see Menang Corporation (M) Berhad's earnings have been skyrocketing, up 40% per annum for the past five years.

Given that Menang Corporation (M) Berhad has only been paying a dividend for a year, there's not much of a past history to draw insight from.

Final Takeaway

Should investors buy Menang Corporation (M) Berhad for the upcoming dividend? Earnings per share have been rising nicely although, even though its cashflow payout ratio is low, we question why Menang Corporation (M) Berhad is paying out so much of its profit. In summary, it's hard to get excited about Menang Corporation (M) Berhad from a dividend perspective.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. For example - Menang Corporation (M) Berhad has 1 warning sign we think you should be aware of.

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.