We will share here the What, When and Who of Dividends
That Could Help You Add That "Little Bit Of Magic" To Your Portfolio.

Are you an expert at trading stocks, buying and selling shares with the magical dexterity of Lionel Messi blazing through the defence line of Real Madrid?

OR, maybe you're a new investor looking for some enchanting investment ideas to get a foothold on your finances?

Whatever your experience level, you might want to look at DIVIDENDS!
They might just be the magic dust needed to give your trading efforts a little bit more omph!

"My current purpose for investing? To have a sustainable source of passive income via dividends"

- Leigh (Dividend Magic)

What are Dividends?

Dividends are like allowances routinely rewarded to you in the form of cash or shares from a company’s net earnings.

Key Takeaways

  • To receive a dividend, you must buy the company’s stock before the Ex-Dividend Date and hold until that date.
  • There are 5 Types of Dividend: Cash, Stock, Property, Scrip, & Liquidated.
  • Make sure to research the company before you invest. 
    • A high Dividend Yield is not always a good thing. 
    • The Payout Ratio can signal a company's financial strength
    • The stock price will adjust downward after the Ex-Date.
  • Companies distribute dividends once or twice a year with some issuing them every 3 months.
  • There are 2 types of Strategies.
    • Dividend Capture – Buying a stock shortly before the Ex-Date to “capture” the dividend, then selling shortly after.
    • Dividend Growth – Building a portfolio of dividend-paying companies and holding for the long term. 

Skip straight to the Company Dividend Noticeboard!

Flavors of Dividends

Not all dividends come in the same form. Here they are in terms of popularity:

  • Cash Dividend – The most basic and popular form of dividend. Money is deposited directly into the trading account of the shareholder.
  • Stock Dividend – When a company issues additional shares less than 25% of the current share balance (1:100 for example). If the portion is above 25% it is a “Stock Split” (1:3).
  • Property Dividend – Companies can sometimes issue non-monetary dividends such as assets or copies of a famous book.
  • Scrip Dividend – Basically, an “I Owe You”. A company issues a promissory note to pay their dividends at a later date. These notes also amass interest, so the longer the wait the more you get! 
  • ​​​​​​​Liquidated Dividend – At the end of a company’s life, they will have to sell everything. After paying off their debts and other obligations, shareholders will receive whatever remains.

While you won't be tasting all of these potionblends, these are important facts that you should be aware of in your research.


Company Dividend Announcement Noticeboard

Now that we've peaked your interest in becoming an apprentice of Magic Dividends, here's a list of companies giving Dividends that you might want to look at. We'll update** this section ahead of each month, so make sure to stay tuned! 

Ex DateStock CodeStock NameDividend Per Share (RM)Dividend
Yield (%)
Payout Ratio (%)Payment DateLast Price (RM)*
11/19/20212089UNITED PLANTATNS0.30006.854375.265612/3/202113.7200
11/19/20215000LAHUME CEMENT INDU5%#N/A#N/A11/30/20211.6800
11/22/20211503GUOCOLAND MSIA0.02002.66670.000012/10/20210.7650
11/22/20215235SSKLCC PROP REIT0.0084#N/A#N/A12/16/20216.8000
11/22/20215235SSKLCC PROP REIT0.0616#N/A#N/A12/16/20216.8000
11/23/20216815EUPE CORPORATION0.0150#N/A0.000012/8/20210.8300
11/23/20219296RCE CAPITAL BHD0.07003.350537.555612/6/20213.8300
11/24/20214707NESTLE (M) BHD0.70001.735298.430812/15/2021133.8000
11/24/20217088POH HUAT RESOUR.0.02003.496530.627012/20/20211.4500
11/25/20215141DAYANG ENT HLDGS0.0150#N/A0.000012/10/20210.9400
11/25/20217232RESINTECH BHD0.01251.46200.000012/10/20210.8650
11/26/20212194MMC CORPORATION#N/A1.758836.512112/3/20211.9900
11/29/20210002KOTRA INDUSTRIES0.07002.241439.427512/9/20212.9000
11/29/20215125PANTECH GROUP0.01003.539836.694112/23/20210.5500
11/29/20215296MR D.I.Y. GROUP0.0065#N/A#N/A12/23/20213.6100
11/29/20217293YINSON HOLDINGS0.04001.022120.317512/17/20215.8900
11/30/20210201NOVA WELLNESS0.01202.77720.000012/8/20210.9550
11/30/20216012MAXIS BERHAD0.04003.728196.237312/30/20214.5700
11/30/20218524TALIWORKS CORP0.01007.6744223.652212/31/20210.8550
12/1/20210012THREE-A RESOURCE0.02202.056135.756912/15/20211.1000
12/1/20210012THREE-A RESOURCE0.00802.056135.756912/15/20211.1000
12/1/20217277DIALOG GROUP0.01901.139732.221712/21/20212.8300
12/2/20210211TASHIN HOLDINGS0.02000.81970.000012/16/20210.6250
12/2/20213298HEXZA CORPN0.07506.2500147.863612/17/20211.2000
12/2/20213816MISC BERHAD0.07504.7826#N/A12/14/20216.9100
12/2/20216351AMWAY MALAYSIA0.05004.928396.394112/17/20215.5800
12/3/20210101TMC LIFE SCIENCE0.00220.294414.43111/3/20220.5750
12/3/20215191TAMBUN INDAH0.02403.694341.419812/23/20210.7850
12/3/20215197FOCUS LUMBER0.05002.6549#N/A12/22/20211.1100
12/3/20217029MASTER PACK GRP0.02002.28570.000012/21/20211.7700
12/3/20217106SUPERMAX CORP0.050018.381521.80961/3/20221.7300
12/6/20215228ELK-DESA RESOUR0.02005.292021.059612/16/20211.3600
12/6/20217081PHARMANIAGA BHD0.02003.3735190.407712/29/20210.8450
12/6/20217140OKA CORP BHD0.02404.739963.482912/17/20210.8650
12/7/20210149FIBON BHD0.00451.227325.596312/29/20210.4400
12/7/20217248SLP RESOURCES0.01505.789576.98161/6/20220.9500
12/7/20219369TEO GUAN LEE0.03001.29310.000012/22/20211.1600
12/8/20215219PESTECH INTL BHD0.00501.00005.75201/7/20221.0000
12/9/20210166INARI AMERTRON0.02802.600519.76851/7/20224.2500
12/9/20217214A-RANK BHD0.02253.305837.930812/22/20210.6000
12/10/20217579AWC BERHAD0.01000.84756.070112/31/20210.5800
12/14/20210199TRI-MODE SYSTEM0.00701.612919.48371/12/20220.6200
12/14/20215196BERJAYA FOOD0.00101.463415.103412/30/20212.0700
12/14/20216432APOLLO FOOD0.02502.4096138.41031/12/20224.1700
12/14/20217152JAYCORP BHD0.05506.609252.013612/30/20211.7200
12/15/20212186KUCHAI DEVELOPMT0.00750.55567.023212/30/20211.8300
12/15/20212186KUCHAI DEVELOPMT0.01000.55567.023212/30/20211.8300
12/15/20212453KLUANG RUBBER0.02150.23812.019312/30/20214.2200
12/15/20212453KLUANG RUBBER0.01000.23812.019312/30/20214.2200
12/15/20212569SG BAGAN RUBBER0.05000.57140.000012/30/20213.5200
12/15/20212569SG BAGAN RUBBER0.02000.57140.000012/30/20213.5200
12/15/20215020GLOMAC BHD0.01002.941226.473412/28/20210.3400
12/15/20219997PENSONIC HOLDGS0.01001.93809.933512/31/20210.6550
12/16/20210189MATANG BHD0.00201.363679.35801/7/20220.1100
12/16/20211562BERJ SPORTS TOTO0.01004.123759.29131/5/20221.9400
12/16/20215827ORIENTAL INTR'ST0.03502.498230.047412/31/20211.0700
12/17/20215108ICAPITAL BIZ BHD0.2000#N/A#N/A12/31/20212.4300

psst... also don't forget as a shareholder you get to attend their AGMs too!

Ex-Date: It's the deadline to be eligible for Dividends. All shares bought on the Ex-Date no longer have the right to receive the declared dividends. In other words, you have to hop on the dividend brookstick before this date or else it will fly away without you.

LET'S TRADE

*Last Price as of 19th November 2021.
**Entitlements last updated 23rd November 2021.
**Entitlement details sourced from Bursa Malaysia.
**Dividend Yield and Payout Ratio sourced from Bloomberg.


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Check Out Leigh from Dividend Magic!

Leigh has a blog all about investing in Malaysia; encouraging frugality, savings, and long-term investing among his readers. 

Website: http://dividendmagic.com.my/
Instagram: @dividendmagic
Twitter: @dividendmagic

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Defense Against the Lark Arts

Lark: to do something spontaneous and unplanned.

  

As you enter the magical world of dividend investing, there are a few quick tips and concepts to keep in mind when looking to conjure up some cash using dividends.

  • A high Dividend Yield (DY) is not always a good thing – While a high DY can indicate high return for your investment it may also indicate that a stock price has decreased significantly since the dividend announcement. 
    • Dividend Yield = Dividend per Share (DPS) / Current Stock Price
  • Keep an eye on the payout ratio – A ratio above 80% could indicate that the company allocates too much EPS to dividend payout and can limit future company growth. A lower ratio could indicate the company is looking to reinvest it’s earnings (eg develop new products) and potentially increase its dividend payout in the future.
    • Payout Ratio = Dividend per Share (DPS) / Earnings per Share (EPS)
  • Reinvest through DRPs – Dividend Reinvestment Plans (DRP) automatically uses your entitled dividend value to buy additional shares. The shares are usually offered at a price lower than the market price. 
  • ​​​​​​​A stock price will reflect the entitlement of dividends – After the ex-dividend date, the stock price should theoretically fall by the DPS amount. This is because the stocks traded on or after the ex-date no longer have the dividend entitlement attached to it, and therefore are worth less unless other sudden factors are at play.

Now... Let's talk Strategy. There are two main types, Dividend Capture and Dividend Growth.

Dividend Capture Strategy

Simply put, the Dividend Capture Strategy involves buying stocks shortly before their ex-dividend date and selling those stocks shortly after their ex-date. 

This ensures that you “capture” the dividend payout. There are literally thousands of dividend-paying stocks in Malaysia each year.

So, if you keep track of the ex- dates using a handy-dandy calendar (like the one we provided above) you could theoretically capture a dividend entitlement every single trading day! Cha Ching! 

However, there’s a caveat. As a stock price reflects the entitlement of dividends, theoretically, a stock price will decline by the DPS amount once the ex-date has passed. 

For example, Company A announces a dividend of RM1 with an ex-date on Tuesday. The stock price on Monday is RM100. Once Tuesday rolls around, the dividend of RM1 is no longer attached to the stocks traded that day, so the stock price should theoretically decrease to RM99 since traders are no longer receiving that entitlement to RM1 per share. We say “theoretically” because there are also other factors that impact the stock price, so it may not necessarily decrease.

Dividend Growth Strategy

While the Dividend Capture Strategy is more for short-term in & out investments, the Dividend Growth Strategy is its long-term complement. 

  

The idea is to build a portfolio of shares in companies with stable growth and a historical trend to announce dividends, and then hold these shares for long periods of time. 

  • Pick companies that increase their dividend payout each year at a rate at least equal to the national inflation rate. 
  • Check that these dividends are paid using actual profit, not debt. 

These types of companies tend to be more established businesses with larger amounts of net revenue or assets. Financial institutions like Maybank or REIT companies like IGBREIT a good example. Additionally, since you’re investing for the long-term, you can be less influenced by short-term market fluctuations. The last thing you’d want to do is panic sell due to a short-term event and forget about the long-term haul. 

While this strategy is safer and more stable, you may find a good portion of your funds being held up by these stocks, limiting your purchasing power for higher return (and higher risk) in short-term investments.

A lot of long-term investors in search of the coveted “passive income” use the Dividend Growth Strategy to achieve that goal. Our friend Dividend Magic (check him out!) is a prime example of such an investor.

A Final Note

Whether you’re a short-term investor looking for a little extra boost in your portfolio or you’re a long-term investor trying to create a steady stream of income, dividends can be a great way to up your investing game. And if you’re somewhere in between, you can always use a combination of these strategies!

If you liked this educational content, then share it with your friends! If you didn’t, then let us know what we can do better via our open survey. We’re always looking to help and improve. 

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