Bintulu Port Holdings Berhad (KLSE:BIPORT) Pays A RM0.02 Dividend In Just Three Days

Readers hoping to buy Bintulu Port Holdings Berhad (KLSE:BIPORT) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. You can purchase shares before the 25th of March in order to receive the dividend, which the company will pay on the 15th of April.

Bintulu Port Holdings Berhad's next dividend payment will be RM0.02 per share, and in the last 12 months, the company paid a total of RM0.10 per share. Based on the last year's worth of payments, Bintulu Port Holdings Berhad stock has a trailing yield of around 2.4% on the current share price of MYR4.1. 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! So we need to investigate whether Bintulu Port Holdings Berhad can afford its dividend, and if the dividend could grow.

See our latest analysis for Bintulu Port Holdings Berhad

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately Bintulu Port Holdings Berhad's payout ratio is modest, at just 49% 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 distributed 36% of its free cash flow as dividends, a comfortable payout level for most companies.

It's positive to see that Bintulu Port Holdings 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.

Click here to see how much of its profit Bintulu Port Holdings Berhad paid out over the last 12 months.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. If earnings fall far enough, the company could be forced to cut its dividend. Bintulu Port Holdings Berhad's earnings per share have fallen at approximately 6.1% a year over the previous five years. When earnings per share fall, the maximum amount of dividends that can be paid also falls.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Bintulu Port Holdings Berhad's dividend payments per share have declined at 12% per year on average over the past 10 years, which is uninspiring. It's never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company's health in an attempt to maintain it.

The Bottom Line

From a dividend perspective, should investors buy or avoid Bintulu Port Holdings Berhad? Earnings per share are down meaningfully, although at least the company is paying out a low and conservative percentage of both its earnings and cash flow. It's definitely not great to see earnings falling, but at least there may be some buffer before the dividend needs to be cut. Overall, it's hard to get excited about Bintulu Port Holdings Berhad from a dividend perspective.

In light of that, while Bintulu Port Holdings Berhad has an appealing dividend, it's worth knowing the risks involved with this stock. For example, Bintulu Port Holdings Berhad has 3 warning signs (and 2 which make us uncomfortable) we think you should know about.

We wouldn't recommend just buying the first dividend stock you see, though. Here's a list of interesting dividend stocks with a greater than 2% yield and an upcoming dividend.

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This article by Simply Wall St is general in nature. 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.
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