In This Article:
Singapore Exchange Limited (SGX:S68) is about to trade ex-dividend in the next 1 days. If you purchase the stock on or after the 10th of October, you won't be eligible to receive this dividend, when it is paid on the 18th of October.
Singapore Exchange's next dividend payment will be S$0.07 per share, on the back of last year when the company paid a total of S$0.3 to shareholders. Last year's total dividend payments show that Singapore Exchange has a trailing yield of 3.6% on the current share price of SGD8.43. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! We need to see whether the dividend is covered by earnings and if it's growing.
See our latest analysis for Singapore Exchange
If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. It paid out 82% of its earnings as dividends last year, which is not unreasonable, but limits reinvestment in the business and leaves the dividend vulnerable to a business downturn. We'd be worried about the risk of a drop in earnings.
Generally speaking, the lower a company's payout ratios, the more resilient its dividend usually is.
Click here to see the company's payout ratio, plus analyst estimates of its future dividends.
Have Earnings And Dividends Been Growing?
Stocks in companies that generate sustainable earnings growth often make the best dividend prospects, as it is easier to lift the dividend when earnings are rising. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. This is why it's a relief to see Singapore Exchange earnings per share are up 4.1% per annum over the last five years.
Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. Since the start of our data, ten years ago, Singapore Exchange has lifted its dividend by approximately 1.4% a year on average.
To Sum It Up
Has Singapore Exchange got what it takes to maintain its dividend payments? Earnings per share have been growing at a reasonable rate, and the company is paying out a bit over half its earnings as dividends. It doesn't appear an outstanding opportunity, but could be worth a closer look.
Ever wonder what the future holds for Singapore Exchange? See what the 14 analysts we track are forecasting, with this visualisation of its historical and future estimated earnings and cash flow