Yahoo Finance Why You Might Be Interested In UOB-Kay Hian Holdings Limited (SGX:U10) For Its Upcoming Dividend
Readers hoping to buy UOB-Kay Hian Holdings Limited (SGX:U10) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. The ex-dividend date is one business day before a company's record date, which is the date on which the company determines which shareholders are entitled to receive a dividend. The ex-dividend date is of consequence because whenever a stock is bought or sold, the trade takes at least two business day to settle. Thus, you can purchase UOB-Kay Hian Holdings' shares before the 7th of May in order to receive the dividend, which the company will pay on the 26th of June.
The company's upcoming dividend is S$0.092 a share, following on from the last 12 months, when the company distributed a total of S$0.092 per share to shareholders. Based on the last year's worth of payments, UOB-Kay Hian Holdings has a trailing yield of 6.5% on the current stock price of S$1.41. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to investigate whether UOB-Kay Hian Holdings can afford its dividend, and if the dividend could grow.
View our latest analysis for UOB-Kay Hian Holdings
Dividends are usually paid out of company profits, so if a company pays out more than it earned then its dividend is usually at greater risk of being cut. That's why it's good to see UOB-Kay Hian Holdings paying out a modest 48% of its earnings.
When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.
Click here to see how much of its profit UOB-Kay Hian Holdings paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. For this reason, we're glad to see UOB-Kay Hian Holdings's earnings per share have risen 15% per annum over the last five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. In the past 10 years, UOB-Kay Hian Holdings has increased its dividend at approximately 3.5% a year on average. It's good to see both earnings and the dividend have improved - although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.
The Bottom Line
Is UOB-Kay Hian Holdings an attractive dividend stock, or better left on the shelf? When companies are growing rapidly and retaining a majority of the profits within the business, it's usually a sign that reinvesting earnings creates more value than paying dividends to shareholders. This is one of the most attractive investment combinations under this analysis, as it can create substantial value for investors over the long run. We think this is a pretty attractive combination, and would be interested in investigating UOB-Kay Hian Holdings more closely.
In light of that, while UOB-Kay Hian Holdings has an appealing dividend, it's worth knowing the risks involved with this stock. For example - UOB-Kay Hian Holdings has 2 warning signs we think you should be aware of.
If you're in the market for strong dividend payers, we recommend checking 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.
