Here's What We Like About Insas Berhad's (KLSE:INSAS) Upcoming Dividend

It looks like Insas Berhad (KLSE:INSAS) is about to go ex-dividend in the next three days. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. In other words, investors can purchase Insas Berhad's shares before the 29th of December in order to be eligible for the dividend, which will be paid on the 17th of January.

The company's next dividend payment will be RM0.025 per share, on the back of last year when the company paid a total of RM0.025 to shareholders. Calculating the last year's worth of payments shows that Insas Berhad has a trailing yield of 2.7% on the current share price of MYR0.915. 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! As a result, readers should always check whether Insas Berhad has been able to grow its dividends, or if the dividend might be cut.

See our latest analysis for Insas Berhad

Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. Insas Berhad has a low and conservative payout ratio of just 13% of its income after tax.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see how much of its profit Insas Berhad paid out over the last 12 months.

KLSE:INSAS Historic Dividend December 25th 2023

Have Earnings And Dividends Been Growing?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. This is why it's a relief to see Insas Berhad earnings per share are up 6.8% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the last 10 years, Insas Berhad has lifted its dividend by approximately 6.8% a year on average. We're glad to see dividends rising alongside earnings over a number of years, which may be a sign the company intends to share the growth with shareholders.

To Sum It Up

Is Insas Berhad an attractive dividend stock, or better left on the shelf? Insas Berhad has seen its earnings per share grow slowly in recent years, and the company reinvests more than half of its profits in the business, which generally bodes well for its future prospects. Insas Berhad ticks a lot of boxes for us from a dividend perspective, and we think these characteristics should mark the company as deserving of further attention.

While it's tempting to invest in Insas Berhad for the dividends alone, you should always be mindful of the risks involved. For example, we've found 3 warning signs for Insas Berhad that we recommend you consider before investing in the business.

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.

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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.