Stock Analysis

Matrix Concepts Holdings Berhad (KLSE:MATRIX) Stock Goes Ex-Dividend In Just Four Days

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Matrix Concepts Holdings Berhad (KLSE:MATRIX) is about to trade ex-dividend in the next 4 days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Therefore, if you purchase Matrix Concepts Holdings Berhad's shares on or after the 22nd of March, you won't be eligible to receive the dividend, when it is paid on the 6th of April.

The company's upcoming dividend is RM0.02 a share, following on from the last 12 months, when the company distributed a total of RM0.083 per share to shareholders. Last year's total dividend payments show that Matrix Concepts Holdings Berhad has a trailing yield of 5.7% on the current share price of MYR1.45. 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! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

Check out our latest analysis for Matrix Concepts Holdings Berhad

Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Fortunately Matrix Concepts Holdings Berhad's payout ratio is modest, at just 50% of profit. 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. It paid out more than half (75%) of its free cash flow in the past year, which is within an average range for most companies.

It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

KLSE:MATRIX Historic Dividend March 17th 2023

Have Earnings And Dividends Been Growing?

Companies that aren't growing their earnings can still be valuable, but it is even more important to assess the sustainability of the dividend if it looks like the company will struggle to grow. If earnings fall far enough, the company could be forced to cut its dividend. With that in mind, we're not enthused to see that Matrix Concepts Holdings Berhad's earnings per share have remained effectively flat over the past five years. Better than seeing them fall off a cliff, for sure, but the best dividend stocks grow their earnings meaningfully over the long run.

The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Matrix Concepts Holdings Berhad's dividend payments are broadly unchanged compared to where they were nine years ago.

To Sum It Up

From a dividend perspective, should investors buy or avoid Matrix Concepts Holdings Berhad? Its earnings per share are effectively flat in recent times. The company paid out less than half its income and more than half its cash flow as dividends to shareholders. Overall, it's hard to get excited about Matrix Concepts Holdings Berhad from a dividend perspective.

If you want to look further into Matrix Concepts Holdings Berhad, it's worth knowing the risks this business faces. For example, we've found 1 warning sign for Matrix Concepts Holdings Berhad that we recommend you consider before investing in the business.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

Valuation is complex, but we're helping make it simple.

Find out whether Matrix Concepts Holdings Berhad is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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