Haily Group Berhad (KLSE:HAILY) is about to trade ex-dividend in the next 3 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. This means that investors who purchase Haily Group Berhad's shares on or after the 21st of September will not receive the dividend, which will be paid on the 16th of October.
The company's next dividend payment will be RM0.0056 per share. Last year, in total, the company distributed RM0.011 to shareholders. Last year's total dividend payments show that Haily Group Berhad has a trailing yield of 2.7% on the current share price of MYR0.41. 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! So we need to investigate whether Haily Group Berhad can afford its dividend, and if the dividend could grow.
See our latest analysis for Haily Group 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 Haily Group Berhad paying out a modest 31% of its earnings. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution.
Click here to see how much of its profit Haily Group Berhad paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend. Haily Group Berhad's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 66% a year over the past five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Haily Group Berhad has seen its dividend decline 18% per annum on average over the past two years, which is not great to see. It's never nice to see earnings and dividends falling, but at least management has cut the dividend rather than potentially risk the company's health in an attempt to maintain it.
To Sum It Up
From a dividend perspective, should investors buy or avoid Haily Group Berhad? Haily Group Berhad's earnings per share have fallen noticeably and, although it paid out less than half its profit as dividends last year, it paid out a disconcertingly high percentage of its cashflow, which is not a great combination. It's not that we think Haily Group Berhad is a bad company, but these characteristics don't generally lead to outstanding dividend performance.