Yahoo Finance MA Financial Group (ASX:MAF) Is Increasing Its Dividend To A$0.14
MA Financial Group Limited's (ASX:MAF) dividend will be increasing from last year's payment of the same period to A$0.14 on 22nd of March. Based on this payment, the dividend yield for the company will be 4.1%, which is fairly typical for the industry.
View our latest analysis for MA Financial Group
MA Financial Group's Dividend Is Well Covered By Earnings
Unless the payments are sustainable, the dividend yield doesn't mean too much. Prior to this announcement, MA Financial Group's earnings easily covered the dividend, but free cash flows were negative. In general, we consider cash flow to be more important than earnings, so we would be cautious about relying on the sustainability of this dividend.
EPS is set to grow by 3.7% over the next year if recent trends continue. If recent patterns in the dividend continue, the payout ratio in 12 months could be 81% which is a bit high but can definitely be sustainable.
MA Financial Group Doesn't Have A Long Payment History
The dividend's track record has been pretty solid, but with only 5 years of history we want to see a few more years of history before making any solid conclusions. Since 2018, the dividend has gone from A$0.07 total annually to A$0.20. This means that it has been growing its distributions at 23% per annum over that time. The dividend has been growing rapidly, however with such a short payment history we can't know for sure if payment can continue to grow over the long term, so caution may be warranted.
MA Financial Group May Find It Hard To Grow The Dividend
The company's investors will be pleased to have been receiving dividend income for some time. However, MA Financial Group has only grown its earnings per share at 3.7% per annum over the past five years. Earnings growth is slow, but on the plus side, the dividend payout ratio is low and dividends could grow faster than earnings, if the company decides to increase its payout ratio.
In Summary
Overall, this is probably not a great income stock, even though the dividend is being raised at the moment. While MA Financial Group is earning enough to cover the payments, the cash flows are lacking. Overall, we don't think this company has the makings of a good income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. To that end, MA Financial Group has 4 warning signs (and 2 which are a bit unpleasant) we think you should know about. Is MA Financial Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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