Dividend stocks in Malaysia
Updated: Dec 2, 2020
Over the decades, a majority of Malaysians are risk-averse such that they prefer to invest in stable stocks rather than high-risk stocks. Thus, dividend payout becomes one of the most significant factors that attract investors to invest in a particular stock. It provides stable cash inflow for investors and is more certain than expected capital gain which is yet to be realised. There are a few important dates that investors should consider before investing in a dividend stock, including announcement date, ex-dividend date, entitlement date and payment date.
In addition, there are a few terms that investors should understand about the subject of dividend, namely interim dividend and special dividend. Interim dividend is a dividend declared and distributed to shareholders before a company’s yearly earnings is determined. Generally, it is distributed frequently to investors quarterly or semi-annually. Special dividend is also referred to as a bonus dividend which is separated from the regular cycle of dividends. It is usually significantly larger than the typical dividend payment of a company. On the other hand, new investors might be curious on the impacts brought by share consolidation. Share consolidation indicates that the company wants to reduce the number of shares outstanding in the market. Hence, the market price increases proportionally while the value of the investors’ holdings will remain the same.
Besides that, investors should also understand the terms of limit up and limit down. Limit up is the maximum increase in a share price during a same trading day. It aims to limit the volatility of share price and to prevent the share price in reaching extreme levels. In contrast, limit down refers to the maximum decline of share price allowed in one trading day.
A simple way for investors to calculate their entitled dividend is to check on a company’s dividend per share from Bursa Malaysia or KLSE Screener. For instance, if a stock’s dividend yield is 3% and the investor has purchased RM10,000 worth of shares. Hence, the investor will receive RM300 in dividends (RM10,000 x3%). On the other hand, dividend yield can also be calculated by dividing dividend per share with current share price. Dividend per share (DPS) is determined by the sum of dividends declared by a company for each outstanding ordinary share. Generally, a good dividend yield is between the range of 4% to 6%. A dividend yield below this range might indicate that it is not a worthy dividend stock to invest in while a yield higher than that carries uncertainties such that the company may cut dividends in the future.
On the other hand, it should be decided when investors should invest in dividend stocks. Firstly, the fundamental background of the desired company should be strong and there are good future prospects of the company’s performance. A good investment of dividend stock should account for dividend income and also capital gain. Capital gain is a profit earned from the price difference between the lower buying price and higher selling price of a stock. A dividend income will not be attractive when a company has negative future prospects which cause its share price to deteriorate subsequently. Typically, conservative Malaysian investors like to invest in banking stocks such as Malayan Banking Berhad because they provide fairly high dividends over the years unless unforeseen circumstances hit in and affect their profitability.
Due to the pandemic of Covid-19, a majority of the companies’ shares have deteriorated. Therefore, it would be the best time for investors to eye on companies which provide dividends regularly. When the economy recovers, investors would enjoy capital gain and also fixed dividend income. Generally, stock price will increase after the company announces their ex-dividend and payment date. Therefore, investors could do analysis on companies which pay dividends annually, especially those companies which still issue dividends regardless of the pandemic. In addition, investors should be alerted that share price might plummet significantly on the date of dividend payment. There are many individual investors who would sell out their shares after receiving dividends. Besides that, there are also several companies which issue dividends on an irregular basis. For instance, Golden Pharos Berhad only issued dividends twice, in 2008 and 2019 respectively. Investors who prefer to have fixed cash inflow should not invest in this company because the distribution of additional earnings to investors is too irregular.
Moreover, there are many companies which issue dividends annually except for 2020. This might be highly related to the impact of Covid-19 on their business performance. This reflects that the company might continue to suffer in the near future as the virus is expected to stay around the globe for another two to three years. As dividend payout to shareholders are subject to a company’s internal decision, it is usually only issued when the company is generating extraordinary earnings. The companies which still issue dividends regardless of the pandemic reflects a strong business fundamental.
*Announcement date: The date on which the details of a dividend payment has been announced by the company’s board of directors.
*Ex-dividend date: Investors need to purchase shares before this date to be entitled for a dividend payout.
*Entitlement date: The date on which a company checks its records to determine the recipient of dividends.
*Payment date: The date on which investors will receive dividends.
*Disclaimer: All statements above are solely my own opinion and do not encourage any buying or selling.
一个投资者们都能简单预计可收股息的方式是通过Bursa Malaysia或KLSE Screener等网站来获取上市公司的“每股派发股息”资料。例如说一个公司的股息百仙比是3%，而投资者拥有RM10,000的股值，他就会获得RM300的股息。除此之外，股息百分比可以用每股派发股息除于现今股票价钱来计算。每股派发股息是由公司所公布的股息总额所决定的。
投资者们不该盲目地纯粹为了获得股息而买入股票。首先，投资者们应该确定此公司的生意背景的运行是好的，并有良好的未来展望。这是因为一个好的投资应该包含股息收入，再加上股值的上升。若是一个公司并没有良好的未来展望，就算投资者们从中获取股息，股息也只会是一个用来填补股值下跌的数额。题外话是，大多是的喜欢收获股息的投资者们都偏好买入银行股。例如说Malayan Banking Group都会定时派发不错的股息，除非公司盈利被外来因素所影响了。
被肺炎所影响，大多数的上市公司股值都受到了不好的影响。因此，有预算的投资者们可以买入一些定期派发股息，并有良好运营的上市公司。当疫情过去后，市场会复苏，股市会迈入牛市。这时投资者们就可以享受股息和股值的大幅度上升。一般上，当上市公司对外宣布他们的股息最迟买入和派发日期后，此股的价钱会上升。因此，投资者们可以做好准备工作，在公司宣布日期之前买入那些定期分发股息的股。投资者们也应该清楚的知道当公司派发股息后，此股的价格将会由于大幅度的抛售而有一定的下跌。也有一些公司派发股息的频率是十分不固定的，就像是Golden Pharos Berhad，它只在2008和2019年派发过股息。想定期获得股息的投资者们就应该避开这类派发不规律的公司。