Three Days Left To Buy Oriental Interest Berhad (KLSE:OIB) Before The Ex-Dividend Date

Some investors rely on dividends for growing their wealth, and if you're one of those dividend sleuths, you might be intrigued to know that Oriental Interest Berhad (KLSE:OIB) is about to go ex-dividend in just three days. The ex-dividend date is commonly two business days before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. In other words, investors can purchase Oriental Interest Berhad's shares before the 26th of June in order to be eligible for the dividend, which will be paid on the 18th of July.

The company's next dividend payment will be RM00.20 per share, and in the last 12 months, the company paid a total of RM0.055 per share. Looking at the last 12 months of distributions, Oriental Interest Berhad has a trailing yield of approximately 3.7% on its current stock price of RM01.47. If you buy this business for its dividend, you should have an idea of whether Oriental Interest Berhad's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

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Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Oriental Interest Berhad paid out a comfortable 26% of its profit last year. A useful secondary check can be to evaluate whether Oriental Interest Berhad generated enough free cash flow to afford its dividend. Dividends consumed 72% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.

It's positive to see that Oriental Interest Berhad's dividend is covered by both profits and cash flow, since this is generally a sign that the dividend is sustainable, and a lower payout ratio usually suggests a greater margin of safety before the dividend gets cut.

View our latest analysis for Oriental Interest Berhad

Click here to see how much of its profit Oriental Interest Berhad paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

When earnings decline, dividend companies become much harder to analyse and own safely. If earnings fall far enough, the company could be forced to cut its dividend. That's why it's not ideal to see Oriental Interest Berhad's earnings per share have been shrinking at 2.0% a year over the previous five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, 10 years ago, Oriental Interest Berhad has lifted its dividend by approximately 13% a year on average.

The Bottom Line

Should investors buy Oriental Interest Berhad for the upcoming dividend? Its earnings per share have been declining meaningfully, although it is paying out less than half its income and more than half its cash flow as dividends. Neither payout ratio appears an immediate concern, but we're concerned about the earnings. Overall, it's hard to get excited about Oriental Interest Berhad from a dividend perspective.

However if you're still interested in Oriental Interest Berhad as a potential investment, you should definitely consider some of the risks involved with Oriental Interest Berhad. Every company has risks, and we've spotted 2 warning signs for Oriental Interest Berhad you should know about.

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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.