Yahoo Finance Hong Leong Financial Group Berhad's (KLSE:HLFG) Shareholders Will Receive A Bigger Dividend Than Last Year
Hong Leong Financial Group Berhad's (KLSE:HLFG) periodic dividend will be increasing on the 30th of March to MYR0.17, with investors receiving 13% more than last year's MYR0.15. Although the dividend is now higher, the yield is only 2.5%, which is below the industry average.
View our latest analysis for Hong Leong Financial Group Berhad
Hong Leong Financial Group Berhad's Payment Expected To Have Solid Earnings Coverage
While yield is important, another factor to consider about a company's dividend is whether the current payout levels are feasible.
Hong Leong Financial Group Berhad has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. While past records don't necessarily translate into future results, the company's payout ratio of 20% also shows that Hong Leong Financial Group Berhad is able to comfortably pay dividends.
Over the next 3 years, EPS is forecast to expand by 20.4%. The future payout ratio could be 24% over that time period, according to analyst estimates, which is a good look for the future of the dividend.
Hong Leong Financial Group Berhad Has A Solid Track Record
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The annual payment during the last 10 years was MYR0.25 in 2013, and the most recent fiscal year payment was MYR0.46. This works out to be a compound annual growth rate (CAGR) of approximately 6.3% a year over that time. Dividends have grown at a reasonable rate over this period, and without any major cuts in the payment over time, we think this is an attractive combination as it provides a nice boost to shareholder returns.
The Dividend Looks Likely To Grow
The company's investors will be pleased to have been receiving dividend income for some time. Hong Leong Financial Group Berhad has impressed us by growing EPS at 11% per year over the past five years. With a decent amount of growth and a low payout ratio, we think this bodes well for Hong Leong Financial Group Berhad's prospects of growing its dividend payments in the future.
We Really Like Hong Leong Financial Group Berhad's Dividend
In summary, it is always positive to see the dividend being increased, and we are particularly pleased with its overall sustainability. The company is easily earning enough to cover its dividend payments and it is great to see that these earnings are being translated into cash flow. Taking this all into consideration, this looks like it could be a good dividend opportunity.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. For example, we've picked out 1 warning sign for Hong Leong Financial Group Berhad that investors should know about before committing capital to this stock. 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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