Singapore Airlines Ltd's Dividend Analysis
Understanding the Dividend Profile of Singapore Airlines Ltd
Singapore Airlines Ltd (SINGY) recently announced a dividend of $0.15 per share, payable on 2024-01-08, with the ex-dividend date set for 2023-12-05. 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 Airlines Ltd's dividend performance and assess its sustainability.
What Does Singapore Airlines Ltd Do?
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Singapore Airlines is Singapore's flagship carrier and one of the region's largest airlines in revenue and carrying capacity. The company's hub is Changi Airport, providing regional and cross-continental passenger and cargo services destined to or transit through Singapore. The company operates under dual brands: the premium carrier, SIA, coupled with its wholly owned subsidiary, and the low-cost regional carrier Scoot. It also owns stakes in SATs and SIA Engineering.
A Glimpse at Singapore Airlines Ltd's Dividend History
Singapore Airlines Ltd has maintained a consistent dividend payment record since 2021. 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 Airlines Ltd's Dividend Yield and Growth
As of today, Singapore Airlines Ltd currently has a 12-month trailing dividend yield of 5.84% and a 12-month forward dividend yield of 5.84%. This suggests an expectation of the same dividend payments over the next 12 months.
Over the past three years, Singapore Airlines Ltd's annual dividend growth rate was -22.00%. Based on Singapore Airlines Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Singapore Airlines Ltd stock as of today is approximately 5.84%.
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 Airlines Ltd's dividend payout ratio is 0.73, which may suggest that the company's dividend may not be sustainable.
Singapore Airlines Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Singapore Airlines Ltd's profitability 5 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported net profit in 7 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Singapore Airlines Ltd's growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Singapore Airlines Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Singapore Airlines Ltd's revenue has decreased by approximately -10.90% per year on average, a rate that underperforms approximately 84.15% 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 Airlines Ltd's earnings increased by approximately 17.40% per year on average, a rate that underperforms approximately 44.32% of global competitors.
Concluding Insights on Singapore Airlines Ltd's Dividends
In conclusion, while Singapore Airlines Ltd presents an attractive dividend yield, the company's dividend growth rate and payout ratio raise questions about the sustainability of its dividends. The profitability and growth metrics provide a mixed picture, indicating fair profitability but underperformance in revenue growth compared to industry peers. Investors should weigh these factors, considering the company's strategic positioning and potential for recovery in the aviation sector. Will Singapore Airlines Ltd navigate through industry headwinds to maintain its dividend attractiveness? Only time will tell.
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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.
