Malaysian Pacific Industries Berhad (KLSE:MPI) Has Announced A Dividend Of MYR0.25

The board of Malaysian Pacific Industries Berhad (KLSE:MPI) has announced that it will pay a dividend of MYR0.25 per share on the 26th of June. Based on this payment, the dividend yield will be 1.8%, which is fairly typical for the industry.

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Malaysian Pacific Industries Berhad's Payment Could Potentially Have Solid Earnings Coverage

We aren't too impressed by dividend yields unless they can be sustained over time. Before making this announcement, Malaysian Pacific Industries Berhad was easily earning enough to cover the dividend. As a result, a large proportion of what it earned was being reinvested back into the business.

Looking forward, earnings per share is forecast to rise by 20.0% over the next year. If the dividend continues on this path, the payout ratio could be 32% by next year, which we think can be pretty sustainable going forward.

Check out our latest analysis for Malaysian Pacific Industries Berhad

Malaysian Pacific Industries Berhad Has A Solid Track Record

The company has an extended history of paying stable dividends. Since 2015, the annual payment back then was MYR0.15, compared to the most recent full-year payment of MYR0.35. This works out to be a compound annual growth rate (CAGR) of approximately 8.8% a year over that time. Companies like this can be very valuable over the long term, if the decent rate of growth can be maintained.

Malaysian Pacific Industries Berhad Could Grow Its Dividend

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. We are encouraged to see that Malaysian Pacific Industries Berhad has grown earnings per share at 6.6% per year over the past five years. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.

We Really Like Malaysian Pacific Industries Berhad's Dividend

In summary, it is good to see that the dividend is staying consistent, and we don't think there is any reason to suspect this might change over the medium term. 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. All of these factors considered, we think this has solid potential as a dividend stock.

Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. However, there are other things to consider for investors when analysing stock performance. For example, we've picked out 1 warning sign for Malaysian Pacific Industries Berhad that investors should know about before committing capital to this stock. Is Malaysian Pacific Industries Berhad not quite the opportunity you were looking for? Why not check out 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.