Malayan Banking Bhd's Dividend Analysis
Assessing the Sustainability of Malayan Banking Bhd's Dividend
Malayan Banking Bhd (MLYNF) recently announced a dividend of $0.31 per share, payable on 2024-03-26, with the ex-dividend date set for 2024-03-13. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Malayan Banking Bhd's dividend performance and assess its sustainability.
What Does Malayan Banking Bhd Do?
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Malayan Banking Bhd is a financial services group with a mostly regional presence in the Association of Southeast Asian Nations. The company's segments include Group Community Financial Services; Group Corporate Banking and Global Markets; Group Investment Banking; Group Asset Management; Group Insurance and Takaful, and Head Office and Others. It generates maximum revenue from the Group Community Financial Services segment.
A Glimpse at Malayan Banking Bhd's Dividend History
Malayan Banking Bhd has maintained a consistent dividend payment record since 2009. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Malayan Banking Bhd's Dividend Yield and Growth
As of today, Malayan Banking Bhd currently has a 12-month trailing dividend yield of 6.79% and a 12-month forward dividend yield of 6.81%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Malayan Banking Bhd's annual dividend growth rate was 0.60%. Extended to a five-year horizon, this rate increased to 4.80% per year. And over the past decade, Malayan Banking Bhd's annual dividends per share growth rate stands at an impressive 10.90%.
Based on Malayan Banking Bhd's dividend yield and five-year growth rate, the 5-year yield on cost of Malayan Banking Bhd stock as of today is approximately 8.58%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Malayan Banking Bhd's dividend payout ratio is 0.75, which may suggest that the company's dividend may not be sustainable.
Malayan Banking Bhd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Malayan Banking Bhd's profitability 4 out of 10 as of 2023-09-30, suggesting the dividend may not be sustainable. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Malayan Banking Bhd's growth rank of 4 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable.
Revenue is the lifeblood of any company, and Malayan Banking Bhd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Malayan Banking Bhd's revenue has increased by approximately 0.30% per year on average, a rate that underperforms approximately 81.04% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Malayan Banking Bhd's earnings decreased by approximately -2.20% per year on average, a rate that underperforms approximately 83% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -1.50%, underperforms approximately 82.2% of global competitors.
Next Steps
In conclusion, while Malayan Banking Bhd's dividend yield is attractive, the company's payout ratio, profitability rank, and growth metrics raise questions about the long-term sustainability of its dividend payments. Investors should consider these factors alongside the company's historical dividend growth rate when evaluating Malayan Banking Bhd as a potential investment for income. As always, it's essential to conduct thorough due diligence before making any investment decisions. Could Malayan Banking Bhd's dividends withstand the test of time, or will investors need to look elsewhere for sustainable income? GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
