[LATEST] KLSE Stock Best Dividend (UPDATED 8 MAY 2022)

Making Money Through Cash Flow from Dividend Stocks

With the recent drop in the overall share market, it is time for us to do some study whether is there any stocks that offers good dividend yield for us to invest in.

Why do we want to invest in dividend stocks?

Dividend stock is a great way to make money.

By investing in dividend stocks, investors can enjoy the benefits of owning a stock combined with the cash flow from dividends.

Dividend is one of the way we can grow our wealth consistently, besides waiting for the share price to appreciate.

Note that we can earn profit in investing through two ways:

1. Capital Appreciation

2. Dividend Yield

Dividends are the cash payments that a company makes to its shareholders out of its profits.

The advantages of investing in dividend stocks are numerous, but here are just a few:

The Advantages and Benefits of Dividend Stocks

Since share price can fluctuate irrationally due to market sentiment, by investing in stocks that also give dividend regardless of the market cycle, we can grow our cash flow.

The advantage of investing in dividend stock is that it offers better return on investment compared to other kinds of stocks.

It is possible for investors to make considerable amounts of money from an investment in dividend stock, though it takes time to realize returns from such investments.

Dividend stocks tend to perform better than other investments during economic downturns, meaning that you'll still receive income when other investments tank.

And generally speaking, companies that pay dividends tend to be more stable than others and possess a lower risk of default than those that don't pay a yield.

Dividend stocks will give you better return because these companies are more mature and stable than the small start-ups, so they know how to invest their profits and have time to grow their income.

Of course, there is no guarantee that dividend stocks will deliver a better return than their non-dividend paying counterparts.

However, many investors are attracted by the promise of quarterly or annual payments and the stability they offer.

Another important reason is that income investing is passive and can help to keep you on track towards your long term goal without having to follow the market closely.

Dividend stocks are generally considered as stocks with sustainable and growing dividend payment.

 Dividends act like a sort of coupon for your shares, meaning that the more dividends you receive from year to year, the greater your total return will be on your investment.

Some stocks give dividend quarterly, some semi-annually, and some annually.

List of KLSE Best Dividend Stocks in 2022

Below are some of the stocks that I have compiled from KLCI main market, where dividend yield is above 5%.

Note that I have filtered out companies where the companies has more cash than its debt.

I'm looking for companies that have at least conservative debt structure.

Most of the PE ratio is also not that high, except WELLCAL which has PE ratio of 19.09.

Nevertheless, it is advisable to also look at the historical PE ratio and also compare it with its peers to have a better understanding of the current PE ratio.

Name	Code	Price	PE	Dividend Yield	Market Cap.(M)
HARTA	5168	4.37	3.29	11.66	14,979
INNO	6262	1.99	10.94	11.06	953
COMFORT	2127	0.71	0.98	9.15	414
TASHIN	211	0.565	3.15	8.85	197
UTDPLT	2089	15.06	14.77	7.64	6,269
KMLOONG	5027	2.05	14.46	6.83	1,983
UCHITEC	7100	2.98	14.83	6.71	1,356
FPI	9172	3.21	8.46	6.23	820
WELLCAL	7231	1.26	19.09	5.56	627
PCHEM	5183	10.2	11.11	5.49	81,600
BPPLAS	5100	1.54	9.33	5.2	434

Very interestingly, some stocks even gave more than 10% dividend yield.

HARTALEGA HOLDINGS BERHAD (5168) and INNOPRISE PLANTATIONS BERHAD (6262) are giving dividend up to 11.66% and 11.06% respectively. This is quite high.

The question will be - is this sustainable?

Dividend Yield from Hartalega:

We know that Hartalega made a significant amount of net profit in 2020 & 2021 due to Covid-19 because they sold a bunch of gloves to all around the world due to the surge in demand.

With the vaccination that has taken place all around the world, will this net profit be maintained?

Looking at the share price of Hartalega, you can see that the share price has dropped significantly lower since 2020 where the price shot up to ~RM21 in 2022. Currently the share price is at ~RM4.37.

Plotting the moving average line, it seems that the share price is still at the downtrend.

I think investors can wait a bit for the share price to move back to the uptrend before entering into this Hartalega stock.

While for COMFORT, TASHIN, UTDPLT, KMLOONG, FPI & UCHITEC are giving a dividend yield from 6.23% up to 9.15%.

WELLCAL, PCHEM and BPPLAS are giving a dividend from 5.2% to 5.56%. This is not bad as well.

Tips for selecting dividend stocks:

In my opinion, investing in dividend stocks is just like getting the return of your capital with interest. 

But if you want to make the investment work for you, the key is the stock selection process.

Dividend stocks have different characteristics than other stocks, thus you need to be extra careful when picking them.

The reasons for investing in dividend stocks could be because you want the income, or you want to reflect your conservative investment philosophy by buying a high quality business with a long history of paying rising dividends.

You may also be hoping that despite their current low price, these stocks will appreciate faster than their higher-priced peers.

And dividend stocks offer investors that rare opportunity where they can have it all: high yield, capital growth and low risk.

Dividend stock investing is the art of investing in those stocks that pay regular dividends.

Why would you want to do this?

Well, it's because the companies that pay dividends tend to be financially sound and usually have a good track record of growth.

More importantly for investors who value income, dividend stocks can provide guaranteed income over time, especially if reinvested within the company's stock (think compound interest).

Most investors focus on return per share, but value investors prefer yield.

The Income Investor believes that shares of good companies with high yields are the best buy at any price.

To find these bargains, it looks for what it calls “Moat on a Stick” stocks—those with sustainable competitive advantages that will remain profitable even if their earnings slip or grow more slowly than expected over the short term.

You see, investing in dividend stocks is a very popular investment strategy.

Most investors are looking for a good return on investment, but there are still plenty of people who have a question about the high dividend stock and its performance.

We don't want high dividend stocks if they do not perform well. 

Understanding what drives the performance of a stock and how dividends are paid is critical to using dividend investing as a smart strategy.

 When looking for the right dividend stocks, it is important to consider a few things.

One of these is the track record of a company.

A good company that has a history of high dividends and growth rates has a better chance of continuing to perform well than a company with one or two good years under its belt.

It is also important to make sure that the dividends are growing at the same rate as the earnings and the price of shares; otherwise there is no point in investing in them.

Dividend stocks have long been an important part of portfolio construction due to their generally steady flows of income.

Investors, however, need to be very careful when it comes to purchasing dividend stocks.

A company's dividend payout, for example, often rises or falls in response to the business cycle and general economic environment.

Therefore, careful consideration should be given as to the reason behind any dramatic changes in a company's dividend policy over time.

Conclusion - do your homework - nothing is free

In conclusion, we know that dividend stocks is good for investors to diversify their wealth.

There are so many advantages for dividend stocks, but at the same time, details analysis need to be done to ensure that we are only investing in solid company that offer consistent dividend payout due to good company performance.

Of all the stocks above, which one caught your attention to research more?

Do you this the dividend yield is sustainable over the long run?

Happy Investing! 😉