Malaysian Pacific Industries Berhad (KLSE:MPI) Has Announced A Dividend Of MYR0.10
Malaysian Pacific Industries Berhad's (KLSE:MPI) investors are due to receive a payment of MYR0.10 per share on 21st of December. This payment means the dividend yield will be 1.3%, which is below the average for the industry.
Check out our latest analysis for Malaysian Pacific Industries Berhad
Malaysian Pacific Industries Berhad's Payment Has Solid Earnings Coverage
Even a low dividend yield can be attractive if it is sustained for years on end. Based on the last payment, Malaysian Pacific Industries Berhad was paying only paying out a fraction of earnings, but the payment was a massive 214% of cash flows. While the business may be attempting to set a balanced dividend policy, a cash payout ratio this high might expose the dividend to being cut if the business ran into some challenges.
Over the next year, EPS is forecast to expand by 23.4%. Assuming the dividend continues along recent trends, we think the payout ratio could be 20% by next year, which is in a pretty sustainable range.
Malaysian Pacific Industries Berhad Has A Solid Track Record
The company has an extended history of paying stable dividends. The dividend has gone from an annual total of MYR0.10 in 2012 to the most recent total annual payment of MYR0.35. This means that it has been growing its distributions at 13% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.
The Dividend Looks Likely To Grow
Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Malaysian Pacific Industries Berhad has seen EPS rising for the last five years, at 10% per annum. 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.
In Summary
In summary, while it's good to see that the dividend hasn't been cut, we are a bit cautious about Malaysian Pacific Industries Berhad's payments, as there could be some issues with sustaining them into the future. While the low payout ratio is a redeeming feature, this is offset by the minimal cash to cover the payments. This company is not in the top tier of income providing stocks.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 7 analysts we track are forecasting for Malaysian Pacific Industries Berhad for free with public analyst estimates for the company. 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.
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