Read This Before Buying Singapore Technologies Engineering Ltd (SGX:S63) For Its Upcoming S$0.05 Dividend
If you are interested in cashing in on Singapore Technologies Engineering Ltd’s (SGX:S63) upcoming dividend of S$0.05 per share, you only have 2 days left to buy the shares before its ex-dividend date, 16 August 2018, in time for dividends payable on the 28 August 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Singapore Technologies Engineering’s most recent financial data to examine its dividend characteristics in more detail.
See our latest analysis for Singapore Technologies Engineering
5 questions to ask before buying a dividend stock
When assessing a stock as a potential addition to my dividend Portfolio, I look at these five areas:
Is it the top 25% annual dividend yield payer?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has the amount of dividend per share grown over the past?
Is is able to pay the current rate of dividends from its earnings?
Will the company be able to keep paying dividend based on the future earnings growth?
How well does Singapore Technologies Engineering fit our criteria?
The company currently pays out 86.51% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. In the near future, analysts are predicting a payout ratio of 82.67%, leading to a dividend yield of around 4.73%. Moreover, EPS should increase to SGD0.19.
If dividend is a key criteria in your investment consideration, then you need to make sure the dividend stock you’re eyeing out is reliable in its payments. Although S63’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
In terms of its peers, Singapore Technologies Engineering generates a yield of 4.43%, which is high for Aerospace & Defense stocks but still below the market’s top dividend payers.
Next Steps:
With this in mind, I definitely rank Singapore Technologies Engineering as a strong dividend stock, and makes it worth further research for anyone who likes steady income generation from their portfolio. Given that this is purely a dividend analysis, I recommend taking sufficient time to understand its core business and determine whether the company and its investment properties suit your overall goals. I’ve put together three pertinent factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for S63’s future growth? Take a look at our free research report of analyst consensus for S63’s outlook.
Valuation: What is S63 worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether S63 is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
