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Singapore Exchange Ltd's Dividend Analysis

Understanding the Upcoming Dividend and Historical Performance

Singapore Exchange Ltd (SPXCF) recently announced a dividend of $0.09 per share, payable on 2024-05-13, with the ex-dividend date set for 2024-05-03. 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?

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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.

Singapore Exchange Ltd's Dividend Analysis
Singapore Exchange Ltd's Dividend Analysis

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 3.62% and a 12-month forward dividend yield of 3.66%. 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%.

Singapore Exchange Ltd's Dividend Analysis
Singapore Exchange Ltd's Dividend Analysis

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 Exchange Ltd's dividend payout ratio is 0.70, which may suggest that the company's dividend may not be sustainable.

Singapore Exchange Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Singapore Exchange Ltd's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of the 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 approximately 52.75% 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 1.70% per year on average, a rate that underperforms approximately 57.12% of global competitors.

Lastly, the company's 5-year EBITDA growth rate of 5.60%, which underperforms approximately 63.52% of global competitors.

Concluding Thoughts on Dividend Sustainability

Considering Singapore Exchange Ltd's consistent dividend history, current yields, and growth rates, the company presents an intriguing case for dividend investors. However, the sustainability of these dividends hinges on the company's ability to maintain profitability and manage payout ratios effectively. Investors should keep a close eye on growth metrics and profitability indicators to gauge future performance. For those looking to explore further, 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.

This article first appeared on GuruFocus.