Hi fellow investors,

High-dividend counters are naturally attractive for income-focused portfolios, especially during macroeconomic uncertainties. However, a high headline yield (e.g., >7%) can easily turn into a value trap if driven by a falling share price rather than expanding underlying earnings.

When screening dividend counters on Bursa, consider these 3 quantitative filters:

• Free Cash Flow (FCF) Coverage: Evaluate dividend distributions against Free Cash Flow per share rather than net accounting profit. Dividends funded by debt or one-off asset sales are unsustainable and signal imminent payout cuts.

• Payout Ratio Safety Margin: A sustainable payout ratio generally sits between 50% - 70% for non-REIT counters. A ratio consistently exceeding 90% leaves zero capital buffer for business reinvestment or economic downturns.

• Total Return Perspective: Dividend yield is only one component of total performance. A 7% yield will not protect your portfolio if capital erosion pulls the underlying share price down by 20% over the same holding period.

Yield should be the natural result of a healthy business model, not a substitute for missing earnings growth. What key metrics do you prioritize when filtering high-yield stocks on Bursa?