Advertisement
U.S. markets closed
  • S&P 500

    5,123.41
    -75.65 (-1.46%)
     
  • Dow 30

    37,983.24
    -475.84 (-1.24%)
     
  • Nasdaq

    16,175.09
    -267.10 (-1.62%)
     
  • Russell 2000

    2,003.17
    -39.43 (-1.93%)
     
  • Crude Oil

    85.45
    +0.43 (+0.51%)
     
  • Gold

    2,360.20
    -12.50 (-0.53%)
     
  • Silver

    27.97
    -0.28 (-0.99%)
     
  • EUR/USD

    1.0646
    -0.0085 (-0.79%)
     
  • 10-Yr Bond

    4.4990
    -0.0770 (-1.68%)
     
  • dólar/libra

    1.2451
    -0.0104 (-0.83%)
     
  • USD/JPY

    153.2400
    +0.0370 (+0.02%)
     
  • Bitcoin USD

    67,265.87
    -1,496.38 (-2.18%)
     
  • CMC Crypto 200

    885.54
    0.00 (0.00%)
     
  • FTSE 100

    7,995.58
    +71.78 (+0.91%)
     
  • Nikkei 225

    39,523.55
    +80.92 (+0.21%)
     

Why It Might Not Make Sense To Buy Cloudpoint Technology Berhad (KLSE:CLOUDPT) For Its Upcoming Dividend

Cloudpoint Technology Berhad (KLSE:CLOUDPT) stock is about to trade ex-dividend in three days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Therefore, if you purchase Cloudpoint Technology Berhad's shares on or after the 7th of March, you won't be eligible to receive the dividend, when it is paid on the 2nd of April.

The company's next dividend payment will be RM00.01 per share. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. We need to see whether the dividend is covered by earnings and if it's growing.

View our latest analysis for Cloudpoint Technology Berhad

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Cloudpoint Technology Berhad paid out 65% of its earnings to investors last year, a normal payout level for most businesses.

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

historic-dividend
historic-dividend

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. If earnings fall far enough, the company could be forced to cut its dividend. Cloudpoint Technology Berhad's earnings have collapsed faster than Wile E Coyote's schemes to trap the Road Runner; down a tremendous 63% a year over the past five years.

Cloudpoint Technology Berhad also issued more than 5% of its market cap in new stock during the past year, which we feel is likely to hurt its dividend prospects in the long run. It's hard to grow dividends per share when a company keeps creating new shares.

This is Cloudpoint Technology Berhad's first year of paying a dividend, so it doesn't have much of a history yet to compare to.

Final Takeaway

Is Cloudpoint Technology Berhad worth buying for its dividend? We're not overly enthused to see Cloudpoint Technology Berhad's earnings in retreat at the same time as the company is paying out more than half of its earnings as dividends to shareholders. In sum this is a middling combination, and we find it hard to get excited about the company from a dividend perspective.

However if you're still interested in Cloudpoint Technology Berhad as a potential investment, you should definitely consider some of the risks involved with Cloudpoint Technology Berhad. We've identified 3 warning signs with Cloudpoint Technology Berhad (at least 1 which is significant), and understanding them should be part of your investment process.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.

Advertisement