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Exploring the Dividend Sustainability and Growth Prospects of SGGKF
Singapore Technologies Engineering Ltd (SGGKF) recently announced a dividend of $0.04 per share, payable on 2024-06-05, with the ex-dividend date set for 2024-05-21. 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?
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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 4.20% and a 12-month forward dividend yield of 4.17%. This suggests an expectation of stable 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 5.18%.
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, which may suggest that the company's dividend is sustainable given its profitability. 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.