In This Article:
Hong Leong Capital Berhad (KLSE:HLCAP) stock is about to trade ex-dividend in 3 days. 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. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Accordingly, Hong Leong Capital Berhad investors that purchase the stock on or after the 27th of October will not receive the dividend, which will be paid on the 21st of November.
The company's next dividend payment will be RM0.17 per share. Last year, in total, the company distributed RM0.17 to shareholders. Based on the last year's worth of payments, Hong Leong Capital Berhad stock has a trailing yield of around 3.5% on the current share price of MYR4.85. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether Hong Leong Capital Berhad can afford its dividend, and if the dividend could grow.
View our latest analysis for Hong Leong Capital 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. It paid out 80% of its earnings as dividends last year, which is not unreasonable, but limits reinvestment in the business and leaves the dividend vulnerable to a business downturn. It could become a concern if earnings started to decline.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see how much of its profit Hong Leong Capital 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. Hong Leong Capital Berhad's earnings per share have fallen at approximately 6.5% a year over the previous five years. Such a sharp decline casts doubt on the future sustainability of the dividend.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. Since the start of our data, nine years ago, Hong Leong Capital Berhad has lifted its dividend by approximately 1.4% a year on average.