Readers hoping to buy Mr D.I.Y. Group (M) Berhad (KLSE:MRDIY) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. The ex-dividend date is important as the process of settlement involves two full business days. So if you miss that date, you would not show up on the company's books on the record date. Therefore, if you purchase Mr D.I.Y. Group (M) Berhad's shares on or after the 28th of November, you won't be eligible to receive the dividend, when it is paid on the 13th of December.
The company's next dividend payment will be RM00.01 per share. Last year, in total, the company distributed RM0.048 to shareholders. Based on the last year's worth of payments, Mr D.I.Y. Group (M) Berhad has a trailing yield of 2.6% on the current stock price of RM01.85. If you buy this business for its dividend, you should have an idea of whether Mr D.I.Y. Group (M) Berhad's dividend is reliable and sustainable. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
See our latest analysis for Mr D.I.Y. Group (M) Berhad
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Mr D.I.Y. Group (M) Berhad is paying out an acceptable 68% of its profit, a common payout level among most companies. 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. Dividends consumed 51% of the company's free cash flow last year, which is within a normal range for most dividend-paying organisations.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
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. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. Mr D.I.Y. Group (M) Berhad's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 80% a year over the past five years.