A Comprehensive Review of the Telecommunication Giant's Dividend History, Yield, Growth, and Future Prospects
Telekom Malaysia Bhd (MYTEF, Financial) recently announced a dividend of $0.1 per share, payable on 2023-09-29, with the ex-dividend date set for 2023-09-11. 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 Telekom Malaysia Bhd's dividend performance and assess its sustainability.
Understanding Telekom Malaysia Bhd's Business
Telekom Malaysia Bhd is a triple-play telecommunications company. It generates revenue from the provision of fixed-line voice services, data, and broadband, and multimedia services to businesses and individual households, and consumers. Broadband and multimedia services are the majority of company revenue. Data is composed of products such as Ethernet and Internet protocol services. Additionally, the company's voice product generates revenue from providing business and residential telephony services. The company owns telecommunications infrastructure. Its segments include Unifi; TM ONE; TM Global; and Shared Services/Others. It generates the vast majority of its revenue in Malaysia.
Tracing Telekom Malaysia Bhd's Dividend History
Telekom Malaysia Bhd has maintained a consistent dividend payment record since 2020. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Deciphering Telekom Malaysia Bhd's Dividend Yield and Growth
As of today, Telekom Malaysia Bhd currently has a 12-month trailing dividend yield of 3.39% and a 12-month forward dividend yield of 3.53%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Telekom Malaysia Bhd's annual dividend growth rate was 95.70%. Extended to a five-year horizon, this rate decreased to 2.50% per year. And over the past decade, Telekom Malaysia Bhd's annual dividends per share growth rate stands at -8.50%.
Based on Telekom Malaysia Bhd's dividend yield and five-year growth rate, the 5-year yield on cost of Telekom Malaysia Bhd stock as of today is approximately 3.84%.
Assessing Dividend Sustainability: 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, Telekom Malaysia Bhd's dividend payout ratio is 0.48.
Telekom Malaysia Bhd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Telekom Malaysia Bhd's profitability 7 out of 10 as of 2023-06-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Future Prospects: Growth Metrics
To ensure the sustainability of dividends, a company must have robust growth metrics. Telekom Malaysia Bhd's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Telekom Malaysia Bhd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Telekom Malaysia Bhd's revenue has increased by approximately 1.70% per year on average, a rate that underperforms than approximately 56.61% 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, Telekom Malaysia Bhd's earnings increased by approximately 21.60% per year on average, a rate that underperforms than approximately 27.96% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 21.10%, underperforms than approximately 23.81% of global competitors.
Wrapping Up
In conclusion, Telekom Malaysia Bhd has demonstrated a strong dividend performance with a consistent payment record and promising yield. However, its dividend growth rate has seen a decrease over the decade. The company's payout ratio and profitability rank indicate a sustainable dividend, backed by robust earnings. Despite underperforming in some growth metrics, the company's overall growth rank suggests a good future outlook. Thus, Telekom Malaysia Bhd presents an intriguing case for investors seeking dividend-paying stocks.
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