Mr D.I.Y. Group (M) Berhad's (KLSE:MRDIY) Dividend Will Be MYR0.012

Mr D.I.Y. Group (M) Berhad's (KLSE:MRDIY) investors are due to receive a payment of MYR0.012 per share on 13th of September. The dividend yield is 2.3% based on this payment, which is a little bit low compared to the other companies in the industry.

Check out our latest analysis for Mr D.I.Y. Group (M) Berhad

Mr D.I.Y. Group (M) Berhad's Dividend Is Well Covered By Earnings

If it is predictable over a long period, even low dividend yields can be attractive. Based on the last payment, Mr D.I.Y. Group (M) Berhad was quite comfortably earning enough to cover the dividend. This indicates that a lot of the earnings are being reinvested into the business, with the aim of fueling growth.

Over the next year, EPS is forecast to expand by 41.6%. If the dividend continues along recent trends, we estimate the payout ratio will be 23%, which is in the range that makes us comfortable with the sustainability of the dividend.

Mr D.I.Y. Group (M) Berhad's Dividend Has Lacked Consistency

Even in its short history, we have seen the dividend cut. Since 2020, the dividend has gone from MYR0.0195 total annually to MYR0.048. This implies that the company grew its distributions at a yearly rate of about 25% over that duration. Mr D.I.Y. Group (M) Berhad has grown distributions at a rapid rate despite cutting the dividend at least once in the past. Companies that cut once often cut again, so we would be cautious about buying this stock solely for the dividend income.

The Dividend Looks Likely To Grow

Growing earnings per share could be a mitigating factor when considering the past fluctuations in the dividend. Mr D.I.Y. Group (M) Berhad has seen EPS rising for the last five years, at 13% per annum. Since earnings per share is growing at an acceptable rate, and the payout policy is balanced, we think the company is positioning itself well to grow earnings and dividends in the future.

Mr D.I.Y. Group (M) Berhad Looks Like A Great Dividend Stock

Overall, we like to see the dividend staying consistent, and we think Mr D.I.Y. Group (M) Berhad might even raise payments in the future. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. 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. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For instance, we've picked out 1 warning sign for Mr D.I.Y. Group (M) Berhad that investors should take into consideration. 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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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.