If you’re a dividend investor looking for stable and growing payouts, these 3 dividend stocks should be on your radar. AEON Credit Service (M) Bhd, Uchi Technologies Bhd, and Padini Holdings Bhd have demonstrated strong financials, steady growth, and reliable dividend distributions. Let’s dive into their performance and future prospects.
AEON Credit Service (M) Bhd (AEONCR)
Business Overview
AEON Credit Service (M) Bhd specializes in consumer financing, offering credit cards, personal financing, and hire purchase loans. The company also provides insurance services through its subsidiary AEON Insurance Brokers (M) Sdn. Bhd. With over 63 branches across Malaysia, AEONCR focuses on serving the mass market with its financing solutions.
Financial & Dividend Performance
- Revenue grew from RM 871.6 million (FY2015) to RM 1.912 billion (FY2024), reflecting an 8% CAGR.
- Net profit rose from RM 215.7 million to RM 424 million, a 7% CAGR.
- Financing receivables increased 11.8% YoY to RM 12.9 billion in Q3 FY2025, mirroring the growth in borrowings to RM 10.51 billion.
- Dividend payout has remained stable at 30-40% over the past 9 years.
- Dividend Yield: Assuming a FY2025 DPS of 32-35 sen and a share price of RM 5.90, the yield stands at 5.4%-5.9%.
Growth Potential & Market Trends
- Malaysia’s economic growth of 4-6% per annum supports AEONCR’s steady expansion.
- Loan financing business remains resilient despite rising impairment losses.
- Revenue continues to grow, despite short-term net profit fluctuations due to interest expenses and impairments.
Key Takeaway: AEONCR remains a solid dividend stock with stable growth, provided non-performing loans remain controlled.
Uchi Technologies Bhd (UCHITEC)
Business Overview
UCHITEC is an Original Design Manufacturer (ODM) specializing in electronic control systems, including components for automatic coffee machines, biotech instruments, and precision weighing scales. The company mainly serves the European market, with Switzerland and Portugal as key destinations.
Financial & Dividend Performance
- Revenue grew from RM 156.67 million (FY2019) to RM 242.52 million (FY2023).
- Net profit almost doubled from RM 76 million (FY2019) to RM 135 million (FY2023).
- UCHITEC is a net cash company with RM 156.24 million in cash and minimal liabilities.
- Dividend payout ratio remains 90%-100%, ensuring attractive returns for investors.
- Dividend Yield: Estimated at 6.6%, assuming a 25.9 sen DPS and share price of RM 3.90.
Growth Potential & Market Trends
- Coffee machine manufacturing contributes 90% of revenue, with biotech and weighing scale products diversifying earnings.
- Minimal exposure to US-China tariffs reduces geopolitical risks.
- Global coffee market expansion ensures long-term demand.
Key Takeaway: UCHITEC’s strong financials and high dividend payout make it a compelling choice for income investors.
Padini Holdings Bhd (PADINI)
Business Overview
Padini Holdings is a leading Malaysian fashion retailer operating multiple brands, including Vincci, PDI, and Seed. The company sells apparel, footwear, and accessories through retail stores and e-commerce platforms.
Financial & Dividend Performance
- Revenue has been on an uptrend except for FY2021, which was impacted by the pandemic.
- PBT has been growing in a good uptrend, but a drop in FY2024 due to decrease in growth profit margin and salary adjustments to the staff as well as the other escalating inflationary employment condition.
- Cash and bank balances stood at RM 766 million (42.5% of total assets) in Q1 FY2025, with zero borrowings.
- Dividend payout ratio typically ranges between 30%-50%, with 11.5 sen DPS maintained since FY2016 (except during COVID-19).
- Dividend Yield: Estimated at 5.0%-5.6%, based on current share price of RM 2.05 and a DPS of 10-11.5 sen.
Growth Potential & Market Trends
- Strong brand presence and affordable pricing make Padini a popular choice among Malaysian consumers.
- Expansion into e-commerce and new retail strategies enhance growth potential.
- Inflationary pressures dampening consumer sentiment and spending may impact short-term profitability, but long-term fundamentals remain intact.
- For FY25, PADINI plans to open four new stores, close down one underperforming location, and refurbish nine existing stores in Malaysia. These initiatives aim to mitigate the impact of volatile raw material prices and sustained pressures from high labour and distribution costs.
Key Takeaway: Padini’s strong cash position and brand strength support stable dividends and future growth.
Conclusion
AEONCR, UCHITEC, and PADINI offer attractive dividend yields with strong financials and long-term growth potential. While AEONCR benefits from Malaysia’s economic expansion, UCHITEC stands out for its high dividend payout and net cash position. PADINI, despite near-term margin pressures, remains a solid pick due to its market presence and debt-free balance sheet. For income investors, these stocks are worth to be in your watchlist.