It looks like Edaran Berhad (KLSE:EDARAN) is about to go ex-dividend in the next three days. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a 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 Edaran Berhad's shares before the 16th of January in order to receive the dividend, which the company will pay on the 7th of February.
The company's next dividend payment will be RM00.03 per share, and in the last 12 months, the company paid a total of RM0.03 per share. Calculating the last year's worth of payments shows that Edaran Berhad has a trailing yield of 1.8% on the current share price of RM01.68. 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 Edaran Berhad has been able to grow its dividends, or if the dividend might be cut.
See our latest analysis for Edaran Berhad
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Edaran Berhad paid out a comfortable 47% of its profit last year. A useful secondary check can be to evaluate whether Edaran Berhad generated enough free cash flow to afford its dividend. Edaran Berhad paid a dividend despite reporting negative free cash flow last year. That's typically a bad combination and - if this were more than a one-off - not sustainable.
Click here to see how much of its profit Edaran Berhad paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. It's encouraging to see Edaran Berhad has grown its earnings rapidly, up 64% a year for the past five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Edaran Berhad has delivered an average of 14% per year annual increase in its dividend, based on the past four years of dividend payments. Both per-share earnings and dividends have both been growing rapidly in recent times, which is great to see.