Public Bank Berhad (KLSE:PBBANK) Is Increasing Its Dividend To MYR0.11
Public Bank Berhad's (KLSE:PBBANK) dividend will be increasing from last year's payment of the same period to MYR0.11 on 24th of March. Based on this payment, the dividend yield for the company will be 4.9%, which is fairly typical for the industry.
See our latest analysis for Public Bank Berhad
Unless the payments are sustainable, the dividend yield doesn't mean too much.
Public Bank Berhad has established itself as a dividend paying company with over 10 years history of distributing earnings to shareholders. Based on Public Bank Berhad's last earnings report, the payout ratio is at a decent 57%, meaning that the company is able to pay out its dividend with a bit of room to spare.
The next 3 years are set to see EPS grow by 16.0%. Analysts forecast the future payout ratio could be 60% over the same time horizon, which is a number we think the company can maintain.
Although the company has a long dividend history, it has been cut at least once in the last 10 years. Since 2015, the dividend has gone from MYR0.104 total annually to MYR0.22. This implies that the company grew its distributions at a yearly rate of about 7.8% over that duration. It's good to see the dividend growing at a decent rate, but the dividend has been cut at least once in the past. Public Bank Berhad might have put its house in order since then, but we remain cautious.
Given that the dividend has been cut in the past, we need to check if earnings are growing and if that might lead to stronger dividends in the future. It's encouraging to see that Public Bank Berhad has been growing its earnings per share at 5.3% a year over the past five years. Earnings are on the uptrend, and it is only paying a small portion of those earnings to shareholders.
Overall, it's great to see the dividend being raised and that it is still in a sustainable range. While the payout ratios are a good sign, we are less enthusiastic about the company's dividend record. The payment isn't stellar, but it could make a decent addition to a dividend portfolio.
It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For example, we've picked out 1 warning sign for Public Bank Berhad that investors should know about before committing capital to this stock. Looking for more high-yielding dividend ideas? Try our collection of strong dividend payers.
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.
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