Dialog Group Berhad’s (KLSE:DIALOG) Dividend Will Be Reduced To MYR0.013

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Dialog Group Berhad’s (KLSE:DIALOG) Dividend Will Be Reduced To MYR0.013

Dialog Group Berhad (KLSE:DIALOG) is reducing its dividend to MYR0.013 on the 26th of Junewhich is 13% less than last year’s comparable payment of MYR0.015. However, the dividend yield of 2.8% is still a decent boost to shareholder returns.

We’ve discovered 2 warning signs about Dialog Group Berhad.

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.

Impressive dividend yields are good, but this doesn’t matter much if the payments can’t be sustained. The last payment made up 82% of earnings, but cash flows were much higher. This leaves plenty of cash for reinvestment into the business.

Looking forward, earnings per share is forecast to rise by 75.4% over the next year. Under the assumption that the dividend will continue along recent trends, we think the payout ratio could be 48% which would be quite comfortable going to take the dividend forward.

KLSE:DIALOG Historic Dividend May 20th 2025

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The company has a long dividend track record, but it doesn’t look great with cuts in the past. Since 2015, the annual payment back then was MYR0.0165, compared to the most recent full-year payment of MYR0.043. This works out to be a compound annual growth rate (CAGR) of approximately 10% a year over that time. It is great to see strong growth in the dividend payments, but cuts are concerning as it may indicate the payout policy is too ambitious.

With a relatively unstable dividend, it’s even more important to see if earnings per share is growing. Dialog Group Berhad’s EPS has fallen by approximately 14% per year during the past five years. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future. On the bright side, earnings are predicted to gain some ground over the next year, but until this turns into a pattern we wouldn’t be feeling too comfortable.

In summary, dividends being cut isn’t ideal, however it can bring the payment into a more sustainable range. The company is generating plenty of cash, which could maintain the dividend for a while, but the track record hasn’t been great. We would probably look elsewhere for an income investment.

It’s important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we’ve identified

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that investors need to be conscious of moving forward. Is Dialog Group Berhad not quite the opportunity you were looking for? Why not check out our

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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.

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#Dialog #Group #Berhads #KLSEDIALOG #Dividend #Reduced #MYR0.013

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