BM GreenTech Berhad (KLSE:BMGREEN) has announced that it will be increasing its dividend from last year’s comparable payment on the 30th of September to MYR0.0275. Despite this raise, the dividend yield of 1.5% is only a modest boost to shareholder returns.
BM GreenTech Berhad’s Payment Could Potentially Have Solid Earnings Coverage
It would be nice for the yield to be higher, but we should also check if higher levels of dividend payment would be sustainable. However, prior to this announcement, BM GreenTech Berhad’s dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.
Looking forward, earnings per share is forecast to rise by 23.4% over the next year. Assuming the dividend continues along recent trends, we think…
