Income Investors Should Know That Theta Edge Berhad (KLSE:THETA) Goes Ex-Dividend Soon

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 Theta Edge Berhad (KLSE:THETA) is about to go ex-dividend in just 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 because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Accordingly, Theta Edge Berhad investors that purchase the stock on or after the 18th of June will not receive the dividend, which will be paid on the 10th of July.

The company's next dividend payment will be RM00.01701 per share. Last year, in total, the company distributed RM0.017 to shareholders. Last year's total dividend payments show that Theta Edge Berhad has a trailing yield of 1.0% on the current share price of RM01.72. 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 Theta Edge Berhad has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Theta Edge 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. Theta Edge Berhad paid out a comfortable 32% of its profit last year. A useful secondary check can be to evaluate whether Theta Edge Berhad generated enough free cash flow to afford its dividend.

Click here to see how much of its profit Theta Edge 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 Theta Edge Berhad's earnings have been skyrocketing, up 34% per annum for the past five years.

Given that Theta Edge Berhad has only been paying a dividend for a year, there's not much of a past history to draw insight from.

To Sum It Up

Should investors buy Theta Edge Berhad for the upcoming dividend? We're glad to see the company has been improving its earnings per share while also paying out a low percentage of income. However, it's not great to see it paying out what we see as an uncomfortably high percentage of its cash flow. In summary, while it has some positive characteristics, we're not inclined to race out and buy Theta Edge Berhad today.

While it's tempting to invest in Theta Edge Berhad for the dividends alone, you should always be mindful of the risks involved. To help with this, we've discovered 3 warning signs for Theta Edge Berhad (2 can't be ignored!) that you ought to be aware of before buying the shares.

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.

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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.