This article first appeared in The Edge Malaysia Weekly on March 24, 2025 - March 30, 2025

WHAT makes some stocks more reliable for dividends than others? Apart from decent earnings growth and steady cash flow, investors also pay attention to the shareholder list. Companies whose controlling or substantial shareholders (with more than 10%) are government-linked companies (GLICs) are, more often than not, expected to declare regular dividends.

In 2024, more than half of the dividend-paying companies among the top 100 by market capitalisation on Bursa Malaysia made more generous payouts, with some even declaring special dividends, according to data compiled by The Edge.

Bank, utility and plantation stocks were among the largest dividend contributors to the country’s five GLICs, namely Permodalan Nasional Bhd (PNB), the Employees Provident Fund (EPF), Khazanah Nasional Bhd, Kumpulan Wang Persaraan (Diperbadankan) (KWAP) and Lembaga Tabung Haji (LTH).

The data shows that PNB received the highest dividend among the five GLICs, with an estimated RM6.21 billion in 2024 (from its top 10 companies in terms of shareholding), marking a 7.25% increase from RM5.79 billion in 2023, followed by EPF.

EPF’s dividends received from local equity investments increased 8.24% to RM4.6 billion, from RM4.25 billion previously. Khazanah’s dividends received from its top 10 companies, in terms of shareholding, grew a modest 2.46% to RM2.91 billion, from RM2.84 billion in 2023.

KWAP’s dividends received also increased marginally by 0.12% to RM1.61 billion from RM1.609 billion in 2023, while LTH’s dividends from the top 10 companies it invested in declined by 2.83% to RM275 million from RM283 million.

Malayan Banking Bhd (KL:MAYBANK), in which PNB holds a 44.64% stake, contributed the most in terms of dividends. The banking group paid RM3.29 billion in 2024, up slightly from RM3.14 billion in the previous year.

Tenaga Nasional Bhd (KL:TENAGA) stood out in PNB’s portfolio in terms of increment in dividend payment in 2024. PNB received RM679 million in dividends from the utility giant — a 44.8% jump from RM469 million in 2023. The amount received was the biggest since the financial year ended Dec 31, 2020, as PNB had raised its shareholding in Tenaga over the years.

Strong crude palm oil prices enabled SD Guthrie Bhd (KL:SDG) (formerly Sime Darby Plantation Bhd) to reward its investors with higher dividends. PNB, which owns a 55.03% stake in SD Guthrie, received RM623 million in dividends from the plantation group in 2024, up 9.5% from RM569 million in the year before. The plantation group declared a dividend per share of 16.36 sen in 2024 compared with 15 sen in 2023.

Over at EPF, the most notable increase in dividend payment came from CIMB Group Holdings Bhd (KL:CIMB), in which the provident fund holds a 16.52% stake. The banking group declared a record high annual dividend per share of 47 sen, including a special dividend of seven sen. This translated into a total dividend of RM834 million received by EPF, compared with RM615 million the year before.

However, the biggest dividend payment for EPF was from its 13.08% stake in Maybank. The amount received was RM963 million (up from RM873 million in the year before).

The provident fund got a total dividend of RM734 million (up from RM692 million previously) from RHB Bank, in which it has a 39.17% stake.

As for Khazanah, its top dividend contributors were CIMB, providing RM1.09 billion (up from RM1.06 billion) via a 21.61% stake, followed by Tenaga, contributing RM606 million (up from RM597 million) through its 20.43% shareholding.

Astro Malaysia Holdings Bhd (KL:ASTRO), in which Khazanah’s wholly-owned unit Pantai Cahaya Bulan Ventures Sdn Bhd holds a 20.65% stake, recorded the lowest payout among the companies in which the sovereign wealth fund holds a substantial stake. The pay-TV operator declared its lowest-ever dividend of 0.25 sen per share for the financial year ended Jan 31, 2024, impacted by higher costs and intensified competition from over-the-top players. This translated into RM3 million for Khazanah.

Maybank, CIMB and Tenaga were the three largest dividend contributors to KWAP. The retirement fund received dividends of RM350 million from Maybank, in which it holds 4.75%; RM306 million from CIMB (6.06%); and RM207 million from Tenaga (6.98%).

In KWAP’s portfolio, Telekom Malaysia Bhd (KL:TM) and Public Bank Bhd (KL:PBBANK) were the two companies that posted the biggest increase in dividend payments. TM’s payout rose 19.6% to RM110 million in 2024 from RM92 million in 2023 while Public Bank recorded a 10.7% increase to RM166 million from RM150 million.

For LTH, Bank Islam Bhd (KL:BIMB) was its largest contributor, distributing RM167 million via its 48.87% stake in the banking group — down from RM174 million a year earlier. Syarikat Takaful Malaysia Keluarga Bhd (KL:TAKAFUL) followed with RM45 million, up from RM33 million previously.

While geopolitical tensions are rising and the tariff war drum is getting louder, there are concerns about the ability of Malaysia’s largest corporations to sustain their generous dividend payouts in 2025.

Of the five GLICs, only PNB is expected to see an increase in dividend income based on analysts’ dividend forecasts tracked by Bloomberg. PNB’s dividend receipts from the top 10 companies in its holdings, in terms of stake size, are set to rise marginally by 1.24% to RM6.29 billion in 2025. Conversely, EPF’s total dividend is expected to fall by 2.57% to RM4.48 billion, Khazanah’s by 10.56% to RM2.6 billion, KWAP’s by 2.73% to RM1.57 billion and LTH’s by 2.18% to RM269 million, should the forecasts prove true.

“Many companies will prioritise strengthening their balance sheets and conserving cash,” a fund manager tells The Edge.

Meanwhile, investors will closely watch how these funds adjust their portfolios to maintain income stability in a changing financial landscape. 

Save by subscribing to us for your print and/or digital copy.

P/S: The Edge is also available on Apple's App Store and Android's Google Play.