Yahoo Finance PGF Capital Berhad (KLSE:PGF) Is About To Go Ex-Dividend, And It Pays A 1.5% Yield
PGF Capital Berhad (KLSE:PGF) is about to trade ex-dividend in the next 4 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 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. Accordingly, PGF Capital Berhad investors that purchase the stock on or after the 31st of July will not receive the dividend, which will be paid on the 15th of August.
The company's upcoming dividend is RM0.01 a share, following on from the last 12 months, when the company distributed a total of RM0.02 per share to shareholders. Based on the last year's worth of payments, PGF Capital Berhad has a trailing yield of 1.5% on the current stock price of MYR1.35. If you buy this business for its dividend, you should have an idea of whether PGF Capital Berhad's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.
See our latest analysis for PGF Capital Berhad
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. PGF Capital Berhad paid out just 20% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances. 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. PGF Capital Berhad paid a dividend despite reporting negative free cash flow over the last twelve months. This may be due to heavy investment in the business, but this is still suboptimal from a dividend sustainability perspective.
Click here to see how much of its profit PGF Capital Berhad paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. It's encouraging to see PGF Capital Berhad has grown its earnings rapidly, up 54% a year for the past five years.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. PGF Capital Berhad's dividend payments are effectively flat on where they were two years ago.
The Bottom Line
Is PGF Capital Berhad worth buying for its dividend? We're glad to see the company has been improving its earnings per share while also paying out a low percentage of income. However, it's not great to see it paying out what we see as an uncomfortably high percentage of its cash flow. To summarise, PGF Capital Berhad looks okay on this analysis, although it doesn't appear a stand-out opportunity.
So while PGF Capital Berhad looks good from a dividend perspective, it's always worthwhile being up to date with the risks involved in this stock. To help with this, we've discovered 3 warning signs for PGF Capital Berhad that you should be aware of before investing in their shares.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.
Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here
