Hong Leong Financial Group Berhad’s (KLSE:HLFG) dividend will be increasing from last year’s payment of the same period to MYR0.32 on 23rd of November. Although the dividend is now higher, the yield is only 2.8%, which is below the industry average.
See our latest analysis for Hong Leong Financial Group Berhad
Hong Leong Financial Group Berhad’s Dividend Forecasted To Be Well Covered By Earnings
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 a long history of paying out dividends, with its current track record at a minimum of 10 years. While past data isn’t a guarantee for the future, Hong Leong Financial Group Berhad’s latest earnings report puts its payout ratio at 20%, showing that the company can pay out its dividends comfortably.
Over the next 3 years, EPS is forecast to expand by 15.6%. The future payout ratio could be 21% 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
The company has a sustained record of paying dividends with very little fluctuation. Since 2013, the annual payment back then was MYR0.36, compared to the most recent full-year payment of MYR0.49. This works out to be a compound annual growth rate (CAGR) of approximately 3.1% a year over that time. Dividends have grown relatively slowly, which is not great, but some investors may value the relative consistency of the dividend.
Hong Leong Financial Group Berhad Could Grow Its Dividend
Some investors will be chomping at the bit to buy some of the company’s stock based on its dividend history. Hong Leong Financial Group Berhad has seen EPS rising for the last five years, at 8.1% per annum. A low payout ratio and decent growth suggests that the company is reinvesting well, and it also has plenty of room to increase the dividend over time.
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. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 4 analysts we track are forecasting for Hong Leong Financial Group Berhad for free with public analyst estimates for the company. 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.
