Should Income Investors Look At Hartalega Holdings Berhad (KLSE:HARTA) Before Its Ex-Dividend?

Regular readers will know that we love our dividends at Simply Wall St, which is why it’s exciting to see Hartalega Holdings Berhad (KLSE:HARTA) is about to trade ex-dividend in the next four days. The ex-dividend date generally occurs two days before the record date, which is the day on which shareholders need to be on the company’s books in order to receive a dividend. The ex-dividend date is important as the process of settlement involves at least two full business days. So if you miss that date, you would not show up on the company’s books on the record date. Therefore, if you purchase Hartalega Holdings Berhad’s shares on or after the 19th of May, you won’t be eligible to receive the dividend, when it is paid on the 16th of June.

The company’s upcoming dividend is RM00.018 a share, following on from the last 12 months, when the company distributed a total of RM0.036 per share to shareholders. Last year’s total dividend payments show that Hartalega Holdings Berhad has a trailing yield of 2.7% on the current share price of RM01.34. Dividends are a major contributor to investment returns for long term holders, but only if the dividend continues to be paid. That’s why we should always check whether the dividend payments appear sustainable, and if the company is growing.

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Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. Hartalega Holdings Berhad paid out a comfortable 41% of its profit last year.

See our latest analysis for Hartalega Holdings Berhad

Click here to see the company’s payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Businesses with shrinking earnings are tricky from a dividend perspective. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. Hartalega Holdings Berhad’s earnings per share have plummeted approximately 49% a year over the previous five years.

Many investors will assess a company’s dividend performance by evaluating how much the dividend payments have changed over time. In the past 10 years, Hartalega Holdings Berhad has increased its dividend at approximately 1.0% a year on average.

The Bottom Line

Is Hartalega Holdings Berhad worth buying for its dividend? Hartalega Holdings Berhad’s earnings per share are down over the past five years, although it has the cushion of a low payout ratio, which would suggest a cut to the dividend is relatively unlikely. Overall, Hartalega Holdings Berhad looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

With that in mind, a critical part of thorough stock research is being aware of any risks that stock currently faces. Our analysis shows 1 warning sign for Hartalega Holdings Berhad and you should be aware of this before buying any shares.

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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.