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Sing Investments & Finance Limited (SGX:S35) is reducing its dividend from last year’s comparable payment to SGD0.06 on the 10th of May. The yield is still above the industry average at 5.9%.
Check out our latest analysis for Sing Investments & Finance
Sing Investments & Finance’s Payment Has Solid Earnings Coverage
A big dividend yield for a few years doesn’t mean much if it can’t be sustained. Based on the last payment, Sing Investments & Finance was quite comfortably earning enough to cover the dividend. This indicates that quite a large proportion of earnings is being invested back into the business.
Over the next year, EPS could expand by 6.7% if recent trends continue. If the dividend continues on this path, the payout ratio could be 42% by next year, which we think can be pretty sustainable going forward.
Dividend Volatility
The company’s dividend history has been marked by instability, with at least one cut in the last 10 years. Since 2014, the dividend has gone from SGD0.0333 total annually to SGD0.06. This implies that the company grew its distributions at a yearly rate of about 6.1% over that duration. We have seen cuts in the past, so while the growth looks promising we would be a little bit cautious about its track record.
We Could See Sing Investments & Finance’s Dividend Growing
With a relatively unstable dividend, it’s even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. Sing Investments & Finance has impressed us by growing EPS at 6.7% per year over the past five years. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.
Our Thoughts On Sing Investments & Finance’s Dividend
Even though the dividend was cut this year, we think Sing Investments & Finance has the ability to make consistent payments in the future. While the payout ratios are a good sign, we are less enthusiastic about the company’s dividend record. The payment isn’t stellar, but it could make a decent addition to a dividend portfolio.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. For instance, we’ve picked out 1 warning sign for Sing Investments & Finance that investors should take into consideration. Is Sing Investments & Finance not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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