Four Days Left Until KESM Industries Berhad (KLSE:KESM) Trades Ex-Dividend
KESM Industries Berhad (KLSE:KESM) is about to trade ex-dividend in the next four days. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company's books in order to receive a dividend. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company's books on the record date. Meaning, you will need to purchase KESM Industries Berhad's shares before the 6th of October to receive the dividend, which will be paid on the 29th of October.
The company's next dividend payment will be RM00.045 per share. Last year, in total, the company distributed RM0.10 to shareholders. Based on the last year's worth of payments, KESM Industries Berhad stock has a trailing yield of around 2.5% on the current share price of RM04.16. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! We need to see whether the dividend is covered by earnings and if it's 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. That's why it's good to see KESM Industries Berhad paying out a modest 48% of its earnings. A useful secondary check can be to evaluate whether KESM Industries Berhad generated enough free cash flow to afford its dividend.
View our latest analysis for KESM Industries Berhad
Click here to see how much of its profit KESM Industries Berhad paid out over the last 12 months.
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. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. This is why it's a relief to see KESM Industries Berhad earnings per share are up 5.2% per annum over the last five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. KESM Industries Berhad has delivered an average of 13% per year annual increase in its dividend, based on the past 10 years of dividend payments. It's encouraging to see the company lifting dividends while earnings are growing, suggesting at least some corporate interest in rewarding shareholders.
Final Takeaway
From a dividend perspective, should investors buy or avoid KESM Industries Berhad? KESM Industries Berhad has seen its earnings per share grow steadily and paid out less than half its profit over the last year. Unfortunately, its dividend was not well covered by free cash flow. Overall, it's hard to get excited about KESM Industries Berhad from a dividend perspective.
So if you want to do more digging on KESM Industries Berhad, you'll find it worthwhile knowing the risks that this stock faces. Our analysis shows 4 warning signs for KESM Industries Berhad that we strongly recommend you have a look at before investing in the company.
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.