Understanding DBS Group Holdings Ltd's Dividend Payouts and Growth
DBS Group Holdings Ltd (DBSDY, Financial) recently announced a dividend of $1.42 per share, payable on 2023-12-07, with the ex-dividend date set for 2023-11-15. 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 DBS Group Holdings Ltd's dividend performance and assess its sustainability.
What Does DBS Group Holdings Ltd Do?
DBS Group Holdings Ltd is a Singapore-based banking group offering a full range of services to consumers, small to midsize enterprises, and corporations and institutions. Its main presence is in Singapore and Greater China. The recent acquisition of Lakshmi Vilas Bank has strengthened DBS's operations in India, and the acquisition of Citibank's Taiwan operation should bring additional growth in Greater China. DBS Group Holdings Ltd's wealth management division is one of the largest in Asia, with assets under management of SGD 320 billion as of June 2023.
A Glimpse at DBS Group Holdings Ltd's Dividend History
DBS Group Holdings Ltd has maintained a consistent dividend payment record since 2003, with dividends currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down DBS Group Holdings Ltd's Dividend Yield and Growth
As of today, DBS Group Holdings Ltd currently has a 12-month trailing dividend yield of 5.03% and a 12-month forward dividend yield of 5.43%, suggesting an expectation of increased dividend payments over the next 12 months.
Over the past three years, DBS Group Holdings Ltd's annual dividend growth rate was -1.40%. Extended to a five-year horizon, this rate increased to 9.80% per year. And over the past decade, DBS Group Holdings Ltd's annual dividends per share growth rate stands at an impressive 10.90%.
Based on DBS Group Holdings Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of DBS Group Holdings Ltd stock as of today is approximately 8.03%.
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 2023-09-30, DBS Group Holdings Ltd's dividend payout ratio is 0.43.
DBS Group Holdings Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks DBS Group Holdings Ltd's profitability 6 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported positive net income for each of 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. DBS Group Holdings Ltd's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and DBS Group Holdings Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. DBS Group Holdings Ltd's revenue has increased by approximately 4.10% per year on average, a rate that underperforms approximately 62.86% 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, DBS Group Holdings Ltd's earnings increased by approximately 8.60% per year on average, a rate that underperforms approximately 49.58% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 10.30%, which underperforms approximately 43.31% of global competitors.
Next Steps
In conclusion, DBS Group Holdings Ltd's dividend payments demonstrate a strong historical commitment to returning value to shareholders. The consistent dividend growth rate, combined with a reasonable payout ratio, signals a sustainable dividend policy. The profitability rank, while fair, supports the company's ability to maintain its dividend payouts. However, the growth metrics present a mixed picture, with revenue growth lagging behind many global competitors, and earnings growth also showing room for improvement. Investors should consider these factors in their overall assessment of DBS Group Holdings Ltd's dividend attractiveness and future prospects. For those seeking additional investment opportunities, 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.
