10 Bursa stocks that pay attractive dividends
EACH year, we have our annual review where we have done the hard work by sourcing and shortlisting Bursa stocks that pay attractive dividends, and there is no exception this year.
Though Malaysia equities ended the year 2023 on minor movement, minus 2.8 per cent as measured by FBM KLCI Index, yet investors that had held throughout 2023 has experienced a huge roller coaster ride, down by as much as 8.4 per cent in mid2023 and soon up by another 6.4 per cent in 2H23.
As volatility seems to be like a tattoo towards the stock market, investing in companies that pay attractive dividends can be a way to navigate through market uncertainty, as investors are able to enjoy regular income stream.
Investing in dividend stocks can offer various benefits for investors:
Steady income: Dividend stocks provide a regular stream of income through dividend payouts, making them attractive for investors seeking a consistent cash flow.
Historical stability: Dividendpaying companies, particularly those with a history of consistently increasing dividends, often exhibit stability and resilience, which can contribute to a more reliable investment.
Inflation hedge: Dividend payments can act as a hedge against inflation. Companies that regularly increase dividends may help investors maintain purchasing power in the face of rising prices.
Long-term wealth accumulation: Reinvesting dividends through dividend reinvestment plans (DRIPs) allows investors to purchase additional shares, compounding their holdings over the long term and potentially accelerating wealth accumulation.
Investor confidence: Dividend payments can instill confidence in investors, signaling that a company is generating sufficient profits to reward shareholders and support future growth initiatives.
Therefore, here we would like to highlight 10 Bursa stocks for investors who are looking for more dividend stock ideas.
Pavilion REIT
Sector: REIT Dividend yield: 10.87 per cent Dividend frequency: SemiAnnual
Pavilion REIT is a REIT established with the principal investment policy of investing, directly and indirectly, in a diversified portfolio of incomeproducing real estate used predominantly for retail purposes in Malaysia and other countries within the Asia-Pacific region as well as real estate-related assets. The company has two reportable segments, retail and office.
PREIT’s earnings are expected to grow to RM 0.08 per share in 2024 from RM 0.08 per share in 2023 with an increased dividend payout ratio of 75 per cent. As such, dividend yield for 2024 is projected at 10.87 per cent, one of the highest in the past few years.
Malayan Banking Bhd
Sector: Financials Dividend yield: 6.46 per cent Dividend frequency: SemiAnnual
Maybank is a financial services group with a mostly regional presence in the Association of Southeast Asian Nations. The company’s segment includes group community financial services; group corporate banking and global markets; group investment banking; group asset management; group insurance and takaful and head office and others.
It generates maximum revenue from the group community financial services segment.
Maybank’s earnings are expected to grow to RM 0.61 per share in 2024 from RM 0.60 per share in 2023 with a dividend payout ratio of 74.94 per cent.
As such, dividend yield for 2024 is projected at 6.46 per cent, similar to the average in the past few years.
RHB Bank Bhd
Sector: Financials Dividend yield: 7.13 per cent Dividend frequency: SemiAnnual
RHB engages in commercial banking and finance-related business and the provision of related services. Its operating segment comprises group community banking; group wholesale banking; group international business; insurance; support center and others.
RHB bank’s earnings are expected to decline to RM 0.41 per share in 2024 from RM 0.40 per share in 2023 with a dividend payout ratio of 61.08 per cent. As such, dividend yield for 2024 is projected at 7.13 per cent, among the highest in the past few years.
Hap Seng Consolidated Bhd
Sector: Industrials Dividend yield: 5.32 per cent Dividend Frequency: SemiAnnual
Hap Seng is an investment holding company. Its subsidiaries produce crude palm oil, develop and invest in commercial and residential real estate, offer financial services such as hire purchase and leasing and term-loans to small and medium enterprises, operate Mercedes Benz dealerships, trade and distribute fertilizers and agrochemicals, and trade and produce building materials such as clay bricks and ceramic tiles. The majority of Hap Seng’s revenue is generated in Malaysia with smaller operations in other Asian countries. Its segment comprise plantation; property; credit financing; automotive; trading; and building materials.
Hap Seng’s earnings are expected to grow to RM 0.32per share in 2024. The group had a consistent dividend payout ratio of close to 80 per cent in the past years. We expect similar payout ratio this year. As such, dividend yield for 2024 is projected at 5.32 per cent, slightly above the average yield in the past few years.
Axiata Group Bhd
Sector: Communication Services Dividend Yield: 5.75 per cent Dividend Frequency: SemiAnnual
Axiata is a telecommunications company. Its mobile segment includes the provision of mobile services and other services such as the provision of interconnect services, sale of devices, pay television transmission services, broadband services and digital business and others. Fixed broadband segment is engaged in the broadband and broadcasting business. Infrastructure segment is engaged in the provision of telecommunication infrastructure and related services. Others comprise investment holding entities, financing entities and other operating companies providing other services including digital business and fibre optic transmission.
Axiata’s earnings are expected to recover to RM 0.08 per share in 2024 from a slump to RM 0.05 per share in 2023 with a dividend payout ratio of 136 per cent. Dividend yield for 2024 is projected at 5.75 per cent, above the average yields in the past few years.
Bank Islam Malaysia Bhd
Sector: Financials Dividend Yield: 11.24 per cent Dividend Frequency: SemiAnnual
Bank Islam is a Malaysia-based Islamic holding company that is principally engaged in providing financial products and services. The company is involved in Islamic business activities mainly through its investment in syariahcompliant business entities. The company also has interests in venture capital, unit trusts, stock broking, offshore banking, and others.
Bank Islam’s earnings are expected to improve slightly to RM 0.25 per share in 2024 from RM 0.24 per share in 2023 with a dividend payout ratio of 57 per cent. As such, dividend yield for 2024 is projected at 11.24 per cent, slightly below previous year but above the average yields in the past few years.
IGB Real Estate Investment Trust
Sector: REIT Dividend Yield: 7.03 per cent Dividend Frequency: SemiAnnual
IGB REIT is a Malaysian retail property investment company. The company’s portfolio includes retail properties and mixed-use developments which have a retail component. Properties are located both domestically and internationally. The company divides its operations into two segments based on its two major retail malls in the portfolio: MVM, which is the Mid Valley Megamall; and TGM, which refers to the Gardens Mall. MVM delivers more than twice as much revenue as TGM. The company generates the majority of revenue from leasing its properties, in addition to service and promotional charges from tenants.
IGB Reit’s earnings are expected to grow to RM 0.11 per share in 2024 from RM 0.10 per share in 2023 with an increased dividend payout ratio of 103.81 per cent. As such, dividend yield for 2024 is projected at 7.03 per cent, one of the highest in the past few years.
Bermaz Auto Bhd
Sector: Consumer Cyclical Dividend Yield: 7.47 per cent Dividend Frequency: Quarterly
Bermaz Auto along with its subsidiaries is engaged in the distribution and retailing of Mazda vehicles as well as providing aftersales services for Mazda vehicles in Malaysia and the Philippines and the majority of revenues is generated from Malaysia.
Bermaz Auto’s earnings are expected to grow to RM 0.29 per share in 2024 from RM 0.25 per share in 2023 with a lower dividend payout ratio of 72.13 per cent. As such, dividend yield for 2024 is projected at 7.47 per cent, still higher than the previous years due a jump in earnings.
Hong Leong Industries Bhd
Sector: Consumer Cyclical Dividend Yield: 6.12 per cent Dividend Frequency: SemiAnnual
Hong Leong Industries is a Malaysia-based investment holding company.
Its only operating segment being Consumer products. Consumer products segment manufacture and sale of consumer products comprises motorcycles, spare parts and ceramic tiles.
Geographically, it derives a majority of revenue from Malaysia.
Hong Leong Industrials’ earnings are expected at RM 0.93 per share in 2024 with an increased dividend payout ratio of 118.28 per cent. As such, dividend yield for 2024 is projected at 6.12 per cent, above the average yields in the past years.
Public Bank Bhd
Sector: Financials Dividend Yield: 6.18 per cent Dividend Frequency: SemiAnnual
Public Bank is a Malaysian banking group that provides a range of financial products and services, including personal banking, commercial banking, Islamic banking, investment banking, share broking, trustee services, nominee services, sale and management of unit trust funds, bancassurance, and general insurance products. Its strategy emphasizes organic growth in the retail banking business, particularly retail consumers and small and medium-sized enterprises. The majority of its revenue comes from the Retail Operations segment.
Public Bank’s earnings are expected to reach RM 0.37 per share in 2024 from RM 0.35 in 2023 with standard dividend payout ratio of 52.45 per cent. As such, dividend yield for 2024 is projected at 6.18 per cent, similar to the previous year.
Key Takeaways
Malaysia can also be considered as an Isla de Muerta where there’s plenty of treasures hidden underneath waiting to be discovered. Investing in strong companies that pays consistent dividends allows investors to sit on regular income that is higher than Fixed Deposits, as all of the companies mentioned in this article has a dividend yield of more than three per cent.
Also, it’s important to note that investing always carries risks, and past performance is not indicative of future results.
Therefore, before making any investment decisions, investors should conduct thorough research and consider their own financial goals and risk tolerance.