CPE Technology Berhad Declares Dividend Ahead of December Payout
The board of CPE Technology Berhad (KLSE: CPETECH) has officially declared a dividend of MYR0.015 per share, set to be distributed on December 23rd. This dividend yields an impressive 4.4% relative to the current stock price, surpassing industry averages.
However, it is crucial to assess the sustainability of these payments. Prior to this announcement, CPE Technology Berhad’s dividends constituted a substantial portion of its earnings, alarmingly at 174% of cash flows. Such metrics unveil a potential risk: diminished cash flows may necessitate a reduction in dividends.
Looking ahead, projections indicate a 22.4% increase in earnings per share (EPS) over the forthcoming year. If this trajectory persists, the payout ratio might stabilize at approximately 35% next year, which appears sustainable in the long run.KLSE: CPETECH Historic Dividend November 23rd 2025
Historically, the dividend has exhibited volatility, suggesting it may be premature to draw definitive conclusions regarding long-term sustainability.
Over the last two years, the annual dividend amounted to MYR0.023 in 2023, contrasting with the more recent FY payment of MYR0.03, indicative of a remarkable annual growth rate of about 14%. Despite this rapid increase, prior cuts raise questions about the stock’s reliability as a future income source.
In light of its unstable dividend, monitoring EPS growth becomes increasingly vital. CPE Technology Berhad has achieved an impressive 12% annual EPS growth over the past five years.
While earnings momentum appears robust, the elevated payout ratio raises concerns about future dividend expansion prospects.
In summary, while the consistency of dividend payments is commendable, the overall payment levels might not be sustainable in the long term.
Although the low payout ratio serves as a favorable element, it is counterbalanced by limited cash availability to support these distributions. Hence, CPE Technology Berhad may not represent an ideal addition to a portfolio focused on income.
Market dynamics highlight the value attributed to a reliable dividend policy compared to erratic alternatives. While dividend payments hold significant weight, they are merely among various factors that warrant consideration when evaluating a company.
Notably, we have identified one cautionary sign for CPE Technology Berhad that investors should heed. If this stock does not align with your investment objectives, consider exploring our selection of top dividend stocks.
Source link: Uk.finance.yahoo.com.
