Yahoo Finance Padini Holdings Berhad (KLSE:PADINI) Will Pay A Dividend Of MYR0.025
Padini Holdings Berhad's (KLSE:PADINI) investors are due to receive a payment of MYR0.025 per share on 29th of March. This means that the annual payment will be 2.9% of the current stock price, which is in line with the average for the industry.
Check out our latest analysis for Padini Holdings Berhad
Padini Holdings Berhad's Earnings Easily Cover The Distributions
While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible. However, Padini Holdings Berhad's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.
The next year is set to see EPS grow by 17.8%. If the dividend continues along recent trends, we estimate the payout ratio will be 35%, which is in the range that makes us comfortable with the sustainability of the dividend.
Dividend Volatility
Although the company has a long dividend history, it has been cut at least once in the last 10 years. Since 2014, the dividend has gone from MYR0.08 total annually to MYR0.10. This works out to be a compound annual growth rate (CAGR) of approximately 2.3% a year over that time. Modest growth in the dividend is good to see, but we think this is offset by historical cuts to the payments. It is hard to live on a dividend income if the company's earnings are not consistent.
Dividend Growth May Be Hard To Achieve
Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. However, Padini Holdings Berhad's EPS was effectively flat over the past five years, which could stop the company from paying more every year. While EPS growth is quite low, Padini Holdings Berhad has the option to increase the payout ratio to return more cash to shareholders.
Our Thoughts On Padini Holdings Berhad's Dividend
Overall, a consistent dividend is a good thing, and we think that Padini Holdings Berhad has the ability to continue this into the future. The payout ratio looks good, but unfortunately the company's dividend track record isn't stellar. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For instance, we've picked out 1 warning sign for Padini Holdings Berhad that investors should take into consideration. Is Padini Holdings Berhad not quite the opportunity you were looking for? Why not check out our selection of top 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.
