Yahoo Finance IGB Berhad (KLSE:IGBB) Passed Our Checks, And It's About To Pay A RM0.05 Dividend
Regular readers will know that we love our dividends at Simply Wall St, which is why it's exciting to see IGB Berhad (KLSE:IGBB) is about to trade ex-dividend in the next 4 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 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. This means that investors who purchase IGB Berhad's shares on or after the 12th of December will not receive the dividend, which will be paid on the 23rd of December.
The company's next dividend payment will be RM0.05 per share, and in the last 12 months, the company paid a total of RM0.10 per share. Based on the last year's worth of payments, IGB Berhad stock has a trailing yield of around 4.3% on the current share price of MYR2.3. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.
Check out our latest analysis for IGB 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. IGB Berhad paid out just 24% of its profit last year, which we think is conservatively low and leaves plenty of margin for unexpected circumstances.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
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. If business enters a downturn and the dividend is cut, the company could see its value fall precipitously. With that in mind, we're encouraged by the steady growth at IGB Berhad, with earnings per share up 8.9% on average over the last five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. IGB Berhad has seen its dividend decline 1.2% per annum on average over the past 10 years, which is not great to see.
The Bottom Line
Is IGB Berhad an attractive dividend stock, or better left on the shelf? IGB 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. Overall, IGB Berhad looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.
In light of that, while IGB Berhad has an appealing dividend, it's worth knowing the risks involved with this stock. For instance, we've identified 4 warning signs for IGB Berhad (2 are significant) you should be aware of.
If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.
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.
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