Investigating the Sustainability of SNGNF's Dividend Payouts
Singapore Telecommunications Ltd (SNGNF, Financial) recently announced a dividend of $0.05 per share, payable on 2023-12-08, with the ex-dividend date set for 2023-11-17. 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 Telecommunications Ltd's dividend performance and assess its sustainability.
What Does Singapore Telecommunications Ltd Do?
Singapore Telecommunications is Singapore's leading telecoms company. It owns extensive wired and wireless networks offering data and voice services to a broad customer base. Singtel's diverse investment portfolio spreads across the region. The firm wholly owns Optus in Australia and minority equity stakes in Airtel (29%) in India; Telkomsel (35%) in Indonesia; Globe Telecom (47%) in the Philippines; and Advanced Information Services (23%) and Intouch (21%) in Thailand. Singtel is majority-owned by the Singapore government.
A Glimpse at Singapore Telecommunications Ltd's Dividend History
Singapore Telecommunications Ltd has maintained a consistent dividend payment record since 2013. Dividends are currently distributed on a bi-annually basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Singapore Telecommunications Ltd's Dividend Yield and Growth
As of today, Singapore Telecommunications Ltd currently has a 12-month trailing dividend yield of 4.29% and a 12-month forward dividend yield of 4.54%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Singapore Telecommunications Ltd's annual dividend growth rate was -18.70%. Extended to a five-year horizon, this rate increased to -16.70% per year. And over the past decade, Singapore Telecommunications Ltd's annual dividends per share growth rate stands at -6.60%.
Based on Singapore Telecommunications Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Singapore Telecommunications Ltd stock as of today is approximately 1.72%.
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, Singapore Telecommunications Ltd's dividend payout ratio is 0.51.
Singapore Telecommunications Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Singapore Telecommunications Ltd's profitability 7 out of 10 as of 2023-09-30, 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 Telecommunications 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 Telecommunications Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Singapore Telecommunications Ltd's revenue has increased by approximately -4.40% per year on average, a rate that underperforms approximately 77.6% 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 Telecommunications Ltd's earnings increased by approximately 24.80% per year on average, a rate that underperforms approximately 23.62% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -22.40%, which underperforms approximately 96.15% of global competitors.
Next Steps
Considering Singapore Telecommunications Ltd's dividend payments, dividend growth rate, payout ratio, profitability, and growth metrics, investors should weigh the historical performance against the current financial health and market position. While the dividend yield is attractive, the negative growth rates in dividends and EBITDA may raise concerns. However, the company's solid profitability rank and payout ratio indicate a potential for sustaining dividends. Investors are encouraged to perform their due diligence, considering both the opportunities and risks associated with Singapore Telecommunications Ltd. For those interested in high-dividend yield stocks, GuruFocus Premium users can utilize the High Dividend Yield Screener to find promising candidates for their portfolios.
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.
