Just Three Days Till Bintulu Port Holdings Berhad (KLSE:BIPORT) Will Be Trading Ex-Dividend

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. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Thus, you can purchase Bintulu Port Holdings Berhad's shares before the 22nd of March in order to receive the dividend, which the company will pay on the 17th of April.

The company's next dividend payment will be RM00.03 per share, on the back of last year when the company paid a total of RM0.12 to shareholders. Based on the last year's worth of payments, Bintulu Port Holdings Berhad has a trailing yield of 2.1% on the current stock price of RM05.75. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. As a result, readers should always check whether Bintulu Port Holdings Berhad has been able to grow its dividends, or if the dividend might be cut.

Check out our latest analysis for Bintulu Port Holdings Berhad

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. That's why it's good to see Bintulu Port Holdings Berhad paying out a modest 44% of its earnings. A useful secondary check can be to evaluate whether Bintulu Port Holdings Berhad generated enough free cash flow to afford its dividend. Fortunately, it paid out only 30% of its free cash flow in the past year.

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 the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Companies with falling earnings are riskier for dividend shareholders. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. That's why it's not ideal to see Bintulu Port Holdings Berhad's earnings per share have been shrinking at 3.4% a year over the previous five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Bintulu Port Holdings Berhad has seen its dividend decline 8.8% per annum on average over the past 10 years, which is not great to see. While it's not great that earnings and dividends per share have fallen in recent years, we're encouraged by the fact that management has trimmed the dividend rather than risk over-committing the company in a risky attempt to maintain yields to shareholders.

To Sum It Up

Is Bintulu Port Holdings Berhad an attractive dividend stock, or better left on the shelf? 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.

On that note, you'll want to research what risks Bintulu Port Holdings Berhad is facing. For example - Bintulu Port Holdings Berhad has 1 warning sign we think you should be aware of.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield dividend stocks.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.