Deep Dive into the Dividend Performance and Sustainability of Malayan Banking Bhd
Malayan Banking Bhd (MLYBY, Financial) recently announced a dividend of $0.13 per share, payable on 2023-10-10, with the ex-dividend date set for 2023-09-14. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's deep dive into Malayan Banking Bhd's dividend performance and assess its sustainability.
What Does Malayan Banking Bhd Do?
Malayan Banking Bhd is a financial services group with a mostly regional presence in the Association of Southeast Asian Nations. The company's segment includes Group Community Financial Services; Group Corporate Banking and Global Markets; Group Investment Banking; Group Asset Management; Group Insurance and Takaful and Head Office and Others. It generates maximum revenue from the Group Community Financial Services segment.
A Glimpse at Malayan Banking Bhd's Dividend History
Malayan Banking Bhd has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Malayan Banking Bhd's Dividend Yield and Growth
As of today, Malayan Banking Bhd currently has a 12-month trailing dividend yield of 6.72% and a 12-month forward dividend yield of 6.88%. This suggests an expectation of increase dividend payments over the next 12 months. Over the past three years, Malayan Banking Bhd's annual dividend growth rate was 0.60%. Extended to a five-year horizon, this rate increased to 4.80% per year. And over the past decade, Malayan Banking Bhd's annual dividends per share growth rate stands at an impressive 10.90%. Based on Malayan Banking Bhd's dividend yield and five-year growth rate, the 5-year yield on cost of Malayan Banking Bhd stock as of today is approximately 8.50%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-06-30, Malayan Banking Bhd's dividend payout ratio is 0.75. This may suggest that the company's dividend may not be sustainable. Malayan Banking Bhd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Malayan Banking Bhd's profitability 5 out of 10 as of 2023-06-30, suggesting fair profitability. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Malayan Banking Bhd's growth rank of 5 out of 10 suggests that the company has a fair growth outlook. Revenue is the lifeblood of any company, and Malayan Banking Bhd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Malayan Banking Bhd's revenue has increased by approximately 0.30% per year on average, a rate that underperforms than approximately 81.19% of global competitors. The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Malayan Banking Bhd's earnings increased by approximately -2.20% per year on average, a rate that underperforms than approximately 81.17% of global competitors. Lastly, the company's 5-year EBITDA growth rate of -1.90%, which underperforms than approximately 82.08% of global competitors.
Next Steps
In conclusion, while Malayan Banking Bhd has a consistent dividend payment record and a promising yield, the sustainability of its dividends is a matter of concern due to its high payout ratio. However, the company's solid profitability and fair growth outlook provide some reassurance. Investors should closely monitor Malayan Banking Bhd's growth metrics and profitability to make informed decisions about the sustainability of its dividends. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
