An In-depth Review of Singapore Exchange Ltd's Dividend Performance and Sustainability
Singapore Exchange Ltd(SPXCF, Financial) recently announced a dividend of $0.09 per share, payable on 2023-10-20, with the ex-dividend date set for 2023-10-12. 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 Exchange Ltd's dividend performance and assess its sustainability.
What Does Singapore Exchange Ltd Do?
Singapore Exchange is a vertically integrated securities exchange business, offering listing, data, trading, clearing and settlement services across equities, debt and derivatives. Singapore Exchange, like Singapore itself, is remarkably outward-facing and offers some of the most liquid and widely traded equity derivative products for various regional markets, including the FTSE China A50 Index Futures and the Indian Nifty 50 Index Futures.
A Glimpse at Singapore Exchange Ltd's Dividend History
Singapore Exchange Ltd has maintained a consistent dividend payment record since 2008. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Singapore Exchange Ltd's Dividend Yield and Growth
As of today, Singapore Exchange Ltd currently has a 12-month trailing dividend yield of 3.25% and a 12-month forward dividend yield of 3.34%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Singapore Exchange Ltd's annual dividend growth rate was 2.20%. Extended to a five-year horizon, this rate decreased to 0.70% per year. And over the past decade, Singapore Exchange Ltd's annual dividends per share growth rate stands at 1.80%.
Based on Singapore Exchange Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Singapore Exchange Ltd stock as of today is approximately 3.37%.
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 2023-06-30, Singapore Exchange Ltd's dividend payout ratio is 0.62.
Singapore Exchange Ltd's profitability rank of 8 out of 10 as of 2023-06-30, suggests 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 Exchange Ltd's growth rank of 8 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 Exchange Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Singapore Exchange Ltd's revenue has increased by approximately 3.30% per year on average, a rate that underperforms than approximately 58.9% 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 Exchange Ltd's earnings increased by approximately 5.70% per year on average, a rate that underperforms than approximately 60.15% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 7.20%, underperforms than approximately 60.28% of global competitors.
Next Steps
In conclusion, Singapore Exchange Ltd's consistent dividend payments, relatively stable growth rate, and decent payout ratio indicate a potentially sustainable dividend performance. However, the company's growth metrics and profitability rank suggest that there may be room for improvement. Investors should continue to monitor these factors to make informed decisions. 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.
