Investors wishing to consider APM Automotive Holdings Berhad (KLSE:APM) for its dividend must act promptly as the stock is on the verge of trading ex-dividend. The ex-dividend date, scheduled for March 14th, precedes the record date – the last day for shareholders to qualify for dividend payment.
At RM00.11 per share, the company will be disbursing payments to its shareholders, with the payout scheduled for March 27th. Over the past year, APM Automotive Holdings Berhad has allocated RM0.14 per share. This results in a trailing yield of 7.6% based on the current share price of RM02.89.
Dividends play a significant role as a source of income for many shareholders, but the financial stability of the business is vital in sustaining a consistent dividend. APM Automotive Holdings Berhad distributed 58% of its earnings to shareholders last year, a level within the standard for most businesses. Moreover, the company only disbursed 13% of its free cash flow in the past year.
A dividend supported by both profit and cash flow indicates its sustainability as long as there is no significant decline in earnings. Furthermore, the company’s earnings per share have shown a steady average growth of 9.5% over the last five years.
However, while earnings per share have been increasing, the company’s dividend payments per share have been declining by an average of 3.7% annually over the past decade. This trend may suggest heavy reinvestment in the business, but it could also signal business volatility.
Currently, APM Automotive Holdings Berhad’s dividend payments remain at an average level, and the company has distributed a conservatively low percentage of its free cash flow, presenting a positive outlook. Nevertheless, it may not be the most enticing dividend prospect.
As investors consider investing in APM Automotive Holdings Berhad for its dividends, a comprehensive evaluation of potential risks is essential. Simply Wall St has highlighted a cautionary indicator for the company, and it would be prudent to consider this before making any investment decisions.
Should you have any feedback or concerns regarding this article, you may contact Simply Wall St or reach out to the editorial team directly at editorial-team (at) simplywallst.com. Please note that while the analysis is supported by historical data and analyst forecasts, it does not serve as a recommendation to buy or sell any stock and does not account for your specific objectives or financial situation.
In conclusion, while APM Automotive Holdings Berhad may appear to be an attractive dividend stock, there are specific factors that investors should carefully consider before making any investment decisions. This serves as a reminder that thorough research and careful consideration are crucial when evaluating potential investments.
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