Scientex Berhad (KLSE:SCIENTX) Could Be A Buy For Its Upcoming Dividend
The stock of Scientex Berhad (KLSE:SCIENTX) will soon go ex-dividend in four days. The ex-dividend date is typically one business day before the record date. The record date is the cutoff date by which you need to be listed as a shareholder on the company's books in order to receive the dividend. The ex-dividend date is significant because it takes two full business days for the settlement process to occur. If you miss this date, you won't be listed as a shareholder on the record date. Thus, if you buy shares of Scientex Berhad on or after July 5th, you won't receive the dividend, which will be paid on July 21st.
The upcoming dividend payment for the company will amount to RM0.05 per share. Last year, the company paid out a total of RM0.10 to its shareholders. Considering the previous year's payments, Scientex Berhad has a trailing yield of 2.9% based on the current stock price of MYR3.45. Dividends play a significant role in long-term investment returns, but it is crucial to ensure that Scientex Berhad can sustain the growth of its dividends or if there is a possibility of a decrease. Therefore, it is advisable for readers to consistently check for updates on Scientex Berhad's dividend progress.
Take a look at our most recent examination of Scientex Berhad
If a business distributes more money as dividends than its earnings, then the dividend might not be able to continue in the future - not the best situation. That's why it's positive to observe Scientex Berhad distributing a reasonable 35% of its earnings as dividends. Another helpful factor to consider is whether Scientex Berhad generated sufficient free cash flow to cover its dividend distribution. Last year, it paid out only 21% of its free cash flow as dividends, which is prudently small.
It's great to observe that the dividend is supported by both profits and cash flow. This generally indicates that the dividend can be maintained, as long as earnings don't experience a significant decline.
To view the payout ratio of the company and get insights into its projected dividends according to analysts, please click on the provided link.
Are Earnings And Dividends Expanding?
Companies that consistently see an increase in their earnings per share are typically the best choices for dividend stocks. These companies tend to find it easier to increase the amount of dividends paid out per share. Investors are quite fond of receiving dividends, so if a company's earnings decrease and the dividend is reduced, it is highly likely that the stock will experience significant selling pressure. Taking this into consideration, we are pleased to observe the steady growth at Scientex Berhad. Over the past five years, the company's earnings per share have increased by an average of 9.6%. Scientex Berhad is retaining more than half of its earnings within the business and has been experiencing a decent rate of earnings growth. We believe this combination is generally appealing because dividends can increase through a combination of earnings growth and/or a higher payout ratio over time.
An additional important method to evaluate a company's potential dividend payouts is by assessing its past performance in increasing dividend rates. Throughout the last decade, Scientex Berhad has consistently achieved a 16% annual growth in dividends. This is a positive sign as it indicates that the company is not only experiencing growth in earnings but also demonstrates a willingness to reward its shareholders.
Should investors consider buying Scientex Berhad for its dividend? While earnings per share growth has been modest, the company is currently distributing less than half of its earnings and cash flow as dividends. This is noteworthy for a couple of reasons: it indicates that management may be reinvesting heavily in the business and leaves room for potential future dividend increases. While it would be preferable to see faster earnings growth, Scientex Berhad's conservative approach to dividend payouts suggests it could still deliver satisfactory long-term performance. Given these factors, it may be worth conducting a more thorough analysis of Scientex Berhad.
Although it may be alluring to put your money into Scientex Berhad solely for the dividends, it is essential to remain cautious about the potential dangers. For instance, there is one indication of concern regarding Scientex Berhad that we believe you should take into consideration.
Typically, it isn't advisable to simply purchase the initial dividend stock you come across. Presented here is a handpicked compilation of captivating stocks renowned for their reliable dividend payments.
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This blog post from Simply Wall St is written in a broad manner. We offer insights based on past information and predictions from analysts, using an impartial approach. Our articles should not be considered as financial guidance. They do not provide suggestions to purchase or sell any stocks, and do not consider your personal goals or financial condition. Our objective is to deliver in-depth analysis that is focused on long-term trends, using fundamental data. Please note that our analysis may not include the most recent, market-sensitive company news or qualitative information. Simply Wall St does not have any holdings in the stocks mentioned.
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