The Allure of Regular Good Dividends

The Allure

of Regular

Good Dividends

Companies that have a good track record of paying regular dividends (anything between 2% and more) are always an attraction to me. Not that I will necessary invest in them, but at least they would in my radar of attention from time to time.

There are actually too many companies on Bursa Malaysia that fits easily into this criteria of mine. So one has to be selective in choosing certain companies which apart from able to pay this range of dividends, their business must also be sustainable in the long run.

Another good point would be if the company is fundamentally sound with minimal debt or better still zero debt. It would be even more wonderful if the company is loaded with cash as well.

Surprisingly on Bursa Malaysia, many of these companies are actually not  actively traded most of the times. It is like the majority of investors of such companies are not bothered by the daily movements of stocks market.

Rather these investors are just happy and contended enough to receive their regular half yearly, quarterly or yearly dividends. Your truly is one such investor if one is to take a closer look at most of my shares all those years.

The remarkable wonder is such companies become almost free or more than free after a number of years of keeping. Two of my more than decade old stocks, Fima Corporation Bhd (Fimacor) and Harrisons Holdings (M) Bhd, (Harrisons) are more than free shares after leaving them untouched regardless of what happened to the world. Not only that, their current share prices are even higher than my previous purchase price.

Keck Seng (M) Bhd, another asset rich and cash rich company which is currently out of flavour and limelight as well, is another free shares for my spouse after keeping it more seventeen years since Nov 2, 1999. The consistent twice yearly dividends received all those years have more than offset the purchase price of RM1.65. Including the bonus 500 shares received means the current price of RM4.84 is still worth easily RM7.26.

LPI Capital Bhd (LPI) is also another superb regular dividends paying company where the dividends seem to grow more and more each year gradually without investor realising it. Dividends received for Financial Year 2012 to 2015 raised gradually from RM325.00, RM350.00, RM375.00 and RM525.00 respectively. For Financial Year 2016, an interim dividends of RM187.50 was paid on Aug 3, 2016.

LPI has yet to announce its final 4th Quarterly Result by this time which is rather a bit unprecedented in my opinion. In the previous few years, LPI used to the first to announce its Quarterly results in every quarter or the rare occasions, by the second or third week of the month.

Instead its senior siblings, Public Bank Berhad superseded LPI in announcing its 4th Quarter Result on Feb 2. It was a strong expected good results.

Anyway, I am confident LPI will also follow suit with an equally impressive 4th Quarterly Result, anytime to be announced next week. I look forward to another final dividends. The current share price of LPI at RM17.18 on Feb 3 means my 750 shares is easily worth RM12,885.00 when compared to my original capital. What a such good investment although I was a late comer to invest in this wonderful solid company.

My basket of defensive stocks is one typical example where the companies invested are expected to pay regular dividends throughout the years again and again although there is no guarantee of that.

Although most of the share prices are below my original purchase price, but the dividends received since the last one year amounted to quiet a good sizeable amount. But as I have already stated that for easier calculations of how my basket of defensive stocks will perform in the longer run, first year dividends received will not be taken into account to offset the selling and buying brokerages charges. Unless the first year dividends is a rather big amount, it will be taken into account.

To date my basket of defensive stocks have received/qualified for a total amount of RM1,800.00 in dividends. At least this dividends can give me some happy Chinese New Year mini ang pow money to enjoy.

On this happy festival joys, a very Happy, Prosperous and even more important, Healthy Chinese New Year to all of you.

Cheers and Gong Xi Fa Cai!