TNB REMAINS FAVOURABLE AMONG INVESTORS WITH STABLE EARNINGS, DIVIDEND PAYOUTS

By Harizah Hanim Mohamed

KUALA LUMPUR, Dec 24 (Bernama) -- Tenaga Nasional Bhd stock remains favourable among analysts given its stable earnings and dividend payout.

Hong Leong Investment Bank has maintained a Buy call on the stock given the company's stable earnings and dividend payout in financial year 2023 (FY2023).

"TNB’s earnings are expected to remain stable in FY2023. We are positive with Tenaga’s long-term commitment to its environmental, sustainability and governance (ESG) growth path, while ensuring returns to shareholders," HLIB said in a note.

CGS-CIMB said TNB's dividend payout policy of between 30 and 60 per cent is intact based on its adjusted profit after tax and minority interest (PATAMI). The group has been paying out more than 50 per cent of its adjusted PATAMI as dividend since 2018.

"We gather that TNB aims to distribute dividend towards the higher end of the dividend policy band. Our target price remains at RM13.60. We like TNB as it has decent dividend yields of more than five per cent for FY2022-FY2024F. It is poised to benefit from Malaysia’s energy transition. For instance, additional grid investments and renewable energy (RE) opportunities could boost its earnings and improve the public’s ESG perception of TNB," it added.

Universiti Utara Malaysia (UUM) School of Economics, Finance and Banking senior lecturer Muhammad Ridhuan Bos Abdullah told Bernama that TNB should be evaluated from two perspectives, as a firm for profit maximisation, and a national utility provider.

Muhammad Ridhuan said TNB has social obligations and it is important for the utility company to stick to them for the beneficial of the people and country.

TNB has steadily paid out dividends to shareholders over the years, most notably at the start of the COVID-19 pandemic in 2019 and at the peak of the pandemic in 2020.

The national utility corporation declared a final dividend of 20 sen per share and a special dividend of 50 sen per share, which brings FY2019 total payout to RM5.69 billion for the same year, the highest dividend payout to date.

In FY2020, TNB declared a final single tier dividend of 18.0 sen per ordinary share and a special single tier dividend of 40.0 sen per ordinary share, which totalled about RM3.31 billion, while for FY2021, it declared a final dividend of 18 sen per share, which amounted to a RM1.03 billion dividend payout.

This steady dividend payouts have benefitted investors, among them being the Employees Provident Fund, Permodalan Nasional Bhd, Retirement Fund Inc, Social Security Organisation and Khazanah Nasional Bhd, being the largest. 

TNB is also one of the heavyweight listed on Bursa Malaysia with a market capitalisation of RM52.3 billion as at Dec 23, 2022.

-- BERNAMA