Why Bursa Malaysia Berhad (KLSE:BURSA) Is a High-Yield, Long-Term Hold in a Volatile Market

In an era of market uncertainty, investors are increasingly prioritizing stability and income generation. Bursa Malaysia Berhad (KLSE:BURSA), the operator of Malaysia's primary stock exchange, has emerged as a compelling candidate for long-term, dividend-driven portfolios. Despite short-term volatility, the company's combination of a robust total shareholder return (TSR), a disciplined dividend policy, and improving fundamentals positions it as a high-yield, long-term hold.

Total Shareholder Return: A 33% Compound Edge

Over the past three years (2022–2025), Bursa Malaysia Berhad delivered a 33% total shareholder return, outpacing many regional peers in a market characterized by erratic swings according to financial reports. This figure reflects a blend of 17% share price appreciation and dividend contributions, which have historically amplified returns for patient investors as data shows. While the 33% TSR falls short of the 40% figure cited in some market discussions, it remains a strong performance, particularly when compared to the broader KLSE Composite Index's uneven trajectory during the same period.

The dividend component of BURSA's TSR has been a key differentiator. For 2025, the forward dividend yield stands at 4.31%, with a recent ex-dividend payment of MYR 0.14 per share as reported. Although this represents a 22.22% decline from the prior year's payout, the company's long-term commitment to distributing at least 75% of post-tax profits as per financial analysis underscores its dedication to shareholder returns. This policy, combined with a dividend reinvestment plan (DRP) that allows shareholders to purchase additional shares at a discount according to market sources, creates a compounding mechanism that enhances long-term value.

Navigating Dividend Volatility: A Sustainable Model?
Critics may point to BURSA's declining dividend payments in recent years, including a 30.43% drop in 2023 and a 22.22% reduction in 2025 as per market data. However, these adjustments reflect a strategic recalibration rather than a collapse in fundamentals. The company's payout ratio has consistently exceeded 100% of earnings, raising sustainability concerns. Yet, BURSA's ability to maintain a 4.31% forward yield in 2025-despite these cuts-demonstrates its resilience in balancing capital preservation with shareholder rewards.

Importantly, the company's dividend policy is anchored to its financial flexibility. By factoring in available cash, equity returns, and capital expenditures, BURSA has maintained a disciplined approach to payouts as financial analysis indicates. This contrasts with firms that prioritize short-term yield over long-term stability, making BURSA a more attractive option for investors seeking consistent, albeit evolving, income streams.

EPS Growth and Analyst Optimism: A Path to Recovery

While BURSA's recent earnings per share (EPS) performance has been mixed-missing estimates by 6.2% in April and July 2025 and 22% in October 2025-analysts remain cautiously optimistic. Forecasts suggest a 6.5% annual EPS growth over the next three years, driven by a projected 10% increase in earnings in 2026. This optimism is reflected in analyst price targets, which have fluctuated but remain anchored to a consensus of RM8.48 per share as of November 2025 according to market data. The most bullish analyst has set a target of RM9.80, while the most pessimistic estimates RM6.65, indicating a wide range of potential outcomes as reported by market analysts.

The "Hold" recommendation from 26 analysts signals a neutral stance, but it also highlights the market's recognition of BURSA's intrinsic value. With analysts forecasting 6.9% revenue growth in 2026, the company's ability to adapt to macroeconomic headwinds-such as rising interest rates and global trade uncertainties-suggests a path to renewed earnings momentum as market analysis indicates.

A Case for Long-Term Investors

For investors with a five- to ten-year horizon, BURSA's combination of a high yield, dividend reinvestment flexibility, and modest EPS growth creates a compelling risk-reward profile. While the company's recent earnings misses and payout ratio concerns warrant caution, its historical commitment to shareholder returns and the structural advantages of its DRP mitigate these risks.

Moreover, BURSA's role as the operator of Malaysia's primary stock exchange provides a unique tailwind. As capital markets recover from pandemic-era volatility, the company is well-positioned to benefit from increased trading activity and regulatory reforms aimed at attracting foreign investment.

Conclusion

Bursa Malaysia Berhad may not offer the explosive growth of a tech disruptor or the rock-solid yields of a utility, but it strikes a rare balance between income generation and capital preservation. With a 33% three-year TSR, a 4.31% forward yield, and a 6.5% EPS growth forecast, BURSA represents a high-yield, long-term hold for investors seeking stability in a volatile market. While short-term volatility is inevitable, the company's fundamentals and disciplined approach to shareholder returns make it a standout in Malaysia's capital markets.