Yahoo Finance Singapore Technologies Engineering Ltd's Dividend Analysis
Understanding the Dividend Prospects for Value Investors
Singapore Technologies Engineering Ltd (SGGKF) recently announced a dividend of $0.04 per share, payable on 2024-05-14, with the ex-dividend date set for 2024-04-30. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Singapore Technologies Engineering Ltd's dividend performance and assess its sustainability.
What Does Singapore Technologies Engineering Ltd Do?
Warning! GuruFocus has detected 11 Warning Signs with SGGKF.
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Singapore Technologies Engineering is a Singaporean government-linked commercial and defense engineering group. Its key businesses include aircraft maintenance, repair and overhaul services, in which it is the world's largest independent third-party provider. The company's fastest-growing activities involve applications to smart city solutions where it provides tolling solutions, traffic control systems, command and control dashboards, cybersecurity tools, and other related components. Around two-thirds of the company's revenue comes from commercial clients while the remainder is defense.
A Glimpse at Singapore Technologies Engineering Ltd's Dividend History
Singapore Technologies Engineering Ltd has maintained a consistent dividend payment record since 2018. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Singapore Technologies Engineering Ltd's Dividend Yield and Growth
As of today, Singapore Technologies Engineering Ltd currently has a 12-month trailing dividend yield of 4.03% and a 12-month forward dividend yield of 4.01%. This suggests an expectation of a decrease in dividend payments over the next 12 months.
Over the past three years, Singapore Technologies Engineering Ltd's annual dividend growth rate was 2.20%. Extended to a five-year horizon, this rate increased to 4.30% per year. And over the past decade, Singapore Technologies Engineering Ltd's annual dividends per share growth rate stands at 10.00%.
Based on Singapore Technologies Engineering Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Singapore Technologies Engineering Ltd stock as of today is approximately 4.97%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Singapore Technologies Engineering Ltd's dividend payout ratio is 0.89, and this may suggest that the company's dividend may not be sustainable.
Singapore Technologies Engineering Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Singapore Technologies Engineering Ltd's profitability 7 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Singapore Technologies Engineering Ltd's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Singapore Technologies Engineering Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Singapore Technologies Engineering Ltd's revenue has increased by approximately 12.10% per year on average, a rate that outperforms approximately 67.86% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Singapore Technologies Engineering Ltd's earnings increased by approximately 1.40% per year on average, a rate that outperforms approximately 41.52% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 0.10%, which outperforms approximately 31.78% of global competitors.
Next Steps
Considering Singapore Technologies Engineering Ltd's consistent dividend payments, moderate growth in dividend rates, and a payout ratio that may raise sustainability questions, investors should keep a close eye on the company's future earnings reports and growth metrics. The company's solid profitability and growth ranks indicate a promising outlook, but it is crucial for investors to consider all aspects of the company's financial health before making investment decisions. Will Singapore Technologies Engineering Ltd maintain its dividend attractiveness, or will changes in profitability and growth metrics necessitate a reevaluation of its dividend policy?
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
