TIME dotCom Berhad (KLSE:TIMECOM) Goes Ex-Dividend Soon
Readers hoping to buy TIME dotCom Berhad (KLSE:TIMECOM) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is commonly two business days 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. The ex-dividend date is important because any transaction on a stock needs to have been settled before the record date in order to be eligible for a dividend. Meaning, you will need to purchase TIME dotCom Berhad's shares before the 11th of September to receive the dividend, which will be paid on the 25th of September.
The company's upcoming dividend is RM00.0541 a share, following on from the last 12 months, when the company distributed a total of RM0.49 per share to shareholders. Based on the last year's worth of payments, TIME dotCom Berhad stock has a trailing yield of around 8.2% on the current share price of RM05.93. If you buy this business for its dividend, you should have an idea of whether TIME dotCom Berhad's dividend is reliable and sustainable. So we need to check whether the dividend payments are covered, and if earnings are growing.
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. TIME dotCom Berhad paid out more than half (69%) of its earnings last year, which is a regular payout ratio for most companies. Yet cash flow is typically more important than profit for assessing dividend sustainability, so we should always check if the company generated enough cash to afford its dividend. It distributed 34% of its free cash flow as dividends, a comfortable payout level for most companies.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
View our latest analysis for TIME dotCom Berhad
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. This is why it's a relief to see TIME dotCom Berhad earnings per share are up 6.6% per annum over the last five years. Decent historical earnings per share growth suggests TIME dotCom Berhad has been effectively growing value for shareholders. However, it's now paying out more than half its earnings as dividends. If management lifts the payout ratio further, we'd take this as a tacit signal that the company's growth prospects are slowing.
Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, TIME dotCom Berhad has increased its dividend at approximately 36% a year on average. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.
Final Takeaway
Should investors buy TIME dotCom Berhad for the upcoming dividend? While earnings per share growth has been modest, TIME dotCom Berhad's dividend payouts are around an average level; without a sharp change in earnings we feel that the dividend is likely somewhat sustainable. Pleasingly the company paid out a conservatively low percentage of its free cash flow. Overall, it's hard to get excited about TIME dotCom Berhad from a dividend perspective.
In light of that, while TIME dotCom Berhad has an appealing dividend, it's worth knowing the risks involved with this stock. To help with this, we've discovered 1 warning sign for TIME dotCom Berhad that you should be aware of before investing in their shares.
Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.
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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.