My Dividend Stock Investing Strategy (Maybank & TNB Stock Analysis)

In this video, I'll be sharing my dividend stock investing strategy and analyzing 2 dividend stocks in Malaysia.

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I usually go for growth stocks that have the potential to double or even triple in value over a few years, but I've been rethinking this strategy.

Going into 2021, I think that I’ll probably shift my investing style in the Malaysian market from growth to dividend investing.

I’m not the biggest fan of dividend investing. It gives me a bit of extra money here and there which is nice, but I’m young and don’t really need a small passive stream of income do I?

I’d probably be better off putting my money into stocks that are more volatile, don’t pay me dividends, yet can give me a better absolute return over the long run.

Here are some reasons why I chose to invest in Malaysian dividend stocks:

First of all, I’m afraid that my growth style of investing wouldn’t work all that well in Malaysia. Usually in my foreign investments, I look for disruptive companies that have the potential to change industries and how we do things like e-commerce and fintech companies.

Unfortunately, I haven’t yet been able to pinpoint similar companies that are listed in the KLSE that fit this criteria.

The largest companies in our market are usually banks, telcos, and plantations. Nothing much that’s new or disruptive that's similar to the Netflix & Shopify’s of the world.

Secondly, investing in dividend stocks locally instead of abroad exempts us from a hefty withholding tax. Malaysians who invest in US companies that pay dividends will be taxed 30% on all their dividends by the US. This is one of the main reasons that I never pursued dividend investing, but its not an issue with Malaysian companies.

This way, I’d actually get the full dividend amount that companies payout and I can even use it to reinvest in more shares through share repurchase programs that can usually get you a better cost basis.

Another thing that I’m keeping in mind is that the majority of my current portfolio is already in high risk high return stocks, so carving this portion of my holdings out for more stable and reliable ones can be a good choice for me.

These are the 2 Malaysian dividend stocks I'm considering:

1. MAYBANK

Maybank is currently worth just under RM100b and have a juicy dividend yield of 7.5%

Maybank is the bank I personally use and I feel that they’re the most innovative of the bunch. Its actually one of the reasons I chose this stock over something like Public Bank

Its refreshing to see them not resting on their lead as the largest bank in Malaysia and actually investing more money in the business with the launch of products like MAE & an e-wallet like acquisition strategy with Maybank QR Pay which I actually use a lot.

In terms of financials, their revenues and margins seem to have recovered from a blip in Q2 2020, which is a good sign going into the recovery phase of the country.

2. TNB

TNB has a market cap of just over RM60b and apparently gives out a dividend of 9.4%. This however, is due to the fact that the company gave out a special dividend of RM0.5 early this year, and its not something that they do regularly.

Excluding this, they have a much more normal dividend yield of just over 4% which seems to be the case over the past few years.

Being the primary source of electricity in the country, the core business is very stable yet unexciting at the same time.

In terms of future potential, TNB acquired a company called Setia Haruman Technology back in 2018 which could potentially open up a whole new revenue stream for the company.

Hey! Thanks for reading the description. We can't fit everything in here, so make sure to watch the whole video to find out more :)

Timecodes:
00:00 Malaysia Dividend Stock Investing
0:42 Why I Haven't Been Investing In Dividend Stocks
1:36 Why I'm Investing In Malaysian Dividend Stocks
3:38 My Top Dividend Stock Picks Malaysia
3:54 Malayan Banking Bhd (Maybank) Stock Analysis
8:08 Tenaga Nasional Bhd Stock Analysis
13:39 How I'm Investing In Malaysian Dividend Stocks

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