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Dayang Enterprise Holdings Bhd (KLSE: DAYANG) is set to trade ex-dividend within the next 3 days. Typically, the ex-dividend date is one business day prior to the record date which is the date a company determines which shareholders are eligible to receive a dividend. The ex-dividend date is important because any share transaction must have been settled before the registration date to be eligible for a dividend. This means that investors who buy the shares of Dayang Enterprise Holdings Bhd on or after November 25 will not receive the dividend, which will be paid on December 10.
The upcoming dividend of the company is 0.015 RM per share, following the last 12 months when the company distributed a total of 0.03 RM per share to shareholders. Based on the value of last year’s payouts, Dayang Enterprise Holdings Bhd stock has a rolling yield of approximately 3.2% on the current stock price of MYR 0.94. Dividends are a major contributor to returns on investment for long-term holders, but only if the dividend continues to be paid. So we need to determine whether Dayang Enterprise Holdings Bhd can afford its dividend and whether the dividend could increase.
Check out our latest analysis for Dayang Enterprise Holdings Bhd
If a company pays more dividends than it has earned, then the dividend could become unsustainable – which is not an ideal situation. Dayang Enterprise Holdings Bhd reported an after-tax loss last year, which means it pays a dividend despite not being profitable. Although this may be a one-time event, it is unlikely to be sustainable in the long term.
Click here to view the company’s payout ratio, as well as analysts’ estimates of its future dividends.
Have profits and dividends increased?
Stocks of companies that generate sustainable earnings growth often offer the best dividend prospects because it’s easier to raise the dividend when earnings rise. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold massively at the same time. Dayang Enterprise Holdings Bhd was unprofitable last year, but at least the general trend suggests that its profits have improved over the past five years. Even so, an unprofitable company whose business does not recover quickly is generally not a good candidate for dividend investors.
We also draw your attention to the fact that Dayang Enterprise Holdings Bhd issued a significant number of new shares during the past year. Trying to raise the dividend while issuing large amounts of new stock reminds us of the ancient Greek tale of Sisyphus – perpetually pushing a rock upward.
Many investors will assess a company’s dividend yield by evaluating how much dividend payments have changed over time. Dayang Enterprise Holdings Bhd has seen its dividend fall by 7.7% per annum on average over the past 10 years, which is not great to see.
Remember, you can still get an overview of the financial health of Dayang Enterprise Holdings Bhd, by checking out our visualization of its financial health, here.
To summarize
Is Dayang Enterprise Holdings Bhd an attractive dividend-paying stock, or better left out? In summary, Dayang Enterprise Holdings Bhd seems to have some promise as a dividend-paying stock, and we suggest you take a closer look.
With this in mind, an essential part of in-depth stock research is being aware of the risks stocks currently face. Every business has risks, and we have spotted 2 warning signs for Dayang Enterprise Holdings Bhd you should know.
A common investment mistake is to buy the first interesting stock you see. Here you will find a list of promising dividend paying stocks with a yield above 2% and an upcoming dividend.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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