SING INVESTMENTS & FINANCE LIMITED. (SGX:S35) will reduce its dividend to S$0.06 on May 10 from last year's equivalent payout. The yield remains above the industry average at 5.9%.
Check out our latest analysis for Sing Investments & Finance.
Sing Investments & Finance payments cover guaranteed returns
Even if you can maintain a high dividend yield for several years, it doesn't mean much if you can't maintain it. Based on the last payment, Sing Investments & Finance very comfortably earned enough income to cover its dividend. This indicates that a significant portion of the profits are invested in the business.
If recent trends continue, EPS could expand by 6.7% over the next 12 months. If the dividend continues at this rate, the payout ratio could be 42% by next year, which we think is quite sustainable going forward.
Dividend volatility
The company's dividend history has been characterized by instability, with the dividend cut at least once in the past 10 years. Since 2014, dividends have increased from a total of S$0.0333 to S$0.06 per year. This means that the company increased its distribution at approximately 6.1% per year over that period. We've seen cuts in the past, so while the growth looks promising, we'd be a little cautious about its track record.
Sing Investments & Finance's dividend could increase
With a relatively unstable dividend, it is even more important to assess whether earnings per share are growing, which could indicate future dividend increases. Sing Investments & Finance has grown its EPS at 6.7% per year over the past five years. Shareholders are getting a good deal of their profits back, and combined with strong growth, this makes it very attractive.
Our thoughts on Sing Investments & Finance's dividend
Although the dividend was cut this year, we believe Sing Investments & Finance has the ability to make stable payments in the future. While the payout ratio is a good sign, we're not too enthusiastic about the company's dividend performance. The dividend isn't great, but it can be a decent addition to your dividend portfolio.
Investors generally prefer companies with consistent and stable dividend policies over companies with irregular dividend policies. At the same time, there are other factors that readers should be aware of before pouring capital into stocks. For example, we chose 1 warning sign for Sing Investments & Finance Investors should consider this. Is Sing Investments & Finance the opportunity you've been looking for? Why not check it out? Selection of high dividend stocks.
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This article by Simply Wall St is general in nature. We provide commentary using only unbiased methodologies, based on historical data and analyst forecasts, and articles are not intended to be financial advice. This is not a recommendation to buy or sell any stock, and does not take into account your objectives or financial situation. We aim to provide long-term, focused analysis based on fundamental data. Note that our analysis may not factor in the latest announcements or qualitative material from price-sensitive companies. Simply Wall St has no position in any stocks mentioned.
