Top 10 Dividend Stocks 2021

Why Invest in Dividend Stocks in Malaysia?

:one: Passive Income

Many investors tend to go for dividend stocks because of its stability (although not all), as high dividend payouts will bring in a sustainable amount of income yearly. A good company will not only pay dividends but also have a capital appreciation, making it a stable investment vehicle.

:two: Low Risk

Especially for those that are less risk-averse, dividend stocks may be the one for you as a high dividend stock generally has a strong fundamental value. Strong fundamental value basically means that the company has a strong and healthy business. You can check this by looking into their balance sheets, past track record, management teams and more.

As most companies that give shareholders dividends are mature companies with stable income streams, it is less risky to invest in them. You can often refer to its historical dividend payouts to predict how much dividends you can get in the coming years.

How to Find High Dividend Stocks in Malaysia

To find high dividend stocks, it is crucial to go through a few selection criteria. Below are some of the recommendations:

1. Dividend yield

It is important to find out their past dividend payout history to understand the time length of the payout and ensure its consistency.
In Malaysia, dividend payouts are usually in cents instead of percentages. To get the accurate dividend yield in percentage, take the yield and divide by the share price.

2. Companies

When finding high dividend stocks, it is essential to select whether it is a small-cap, mid-cap, or large-cap company. Usually, mid-cap to large-cap companies are preferred even if the dividends are slightly lower because they’re more reliable, which means your dividend payouts are more consistent.

3. Sustainable dividend payout ratio

A healthy dividend payout ratio will typically remain between 35% ~ 55%, giving it room for remaining incomes to be reinvested.