TELKOM INDONESIA PERSERO-ADR (NYSE:TLK) – A High-Yield Dividend Stock Worth Considering

TELKOM INDONESIA PERSERO-ADR (NYSE:TLK) was identified by our dividend stock screener as a potential candidate for income-focused investors. The company offers an attractive dividend yield while maintaining solid profitability and reasonable financial health. Below, we examine why TLK stands out for dividend investors.

Key Dividend Strengths

• High Dividend Yield: TLK currently offers a yield of 6.71%, significantly above the industry average of 4.76% and the S&P 500 average of 2.36%.
• Reliable Track Record: The company has paid dividends for at least 10 years, demonstrating a commitment to returning capital to shareholders.
• Sustainable Growth: While dividend growth has been modest (1.73% annually), earnings growth has outpaced dividend increases, suggesting sustainability.

Profitability & Financial Health

• Strong Profitability: TLK scores an 8 out of 10 in profitability, with high margins (15.77% net profit margin) and strong returns on equity (16.64%).
• Reasonable Valuation: With a P/E ratio of 11.48, TLK trades below both the industry and S&P 500 averages, making it an affordable pick.
• Solid Solvency: The company maintains a manageable debt-to-equity ratio (0.39) and has sufficient cash flow to cover obligations.

Considerations

• Payout Ratio: At 74.77%, the payout ratio is on the higher side, which could limit future dividend growth if earnings stagnate.
• Liquidity Concerns: TLK’s current and quick ratios (both 0.82) are below ideal levels, though strong solvency mitigates near-term risks.

For a deeper look, review the full fundamental report on TLK.

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Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.