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Singapore Land Group Limited (SGX:U06) is about to trade ex-dividend in the next 3 days. The ex-dividend date is one business day before the record date, which is the cut-off date for shareholders to be present on the company's books to be eligible for a dividend payment. It is important to be aware of the ex-dividend date because any trade on the stock needs to have been settled on or before the record date. Meaning, you will need to purchase Singapore Land Group's shares before the 3rd of May to receive the dividend, which will be paid on the 24th of May.
The company's next dividend payment will be S$0.04 per share. Last year, in total, the company distributed S$0.04 to shareholders. Based on the last year's worth of payments, Singapore Land Group has a trailing yield of 2.2% on the current stock price of S$1.80. 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! So we need to investigate whether Singapore Land Group can afford its dividend, and if the dividend could grow.
See our latest analysis for Singapore Land Group
Dividends are typically paid from company earnings. If a company pays more in dividends than it earned in profit, then the dividend could be unsustainable. Singapore Land Group is paying out just 21% of its profit after tax, which is comfortably low and leaves plenty of breathing room in the case of adverse events. Yet cash flows are even more important than profits for assessing a dividend, so we need to see if the company generated enough cash to pay its distribution. It paid out 17% of its free cash flow as dividends last year, which is conservatively low.
It's encouraging to see that the dividend is covered by both profit and cash flow. This generally suggests the dividend is sustainable, as long as earnings don't drop precipitously.
Click here to see how much of its profit Singapore Land Group paid out over the last 12 months.
Have Earnings And Dividends Been Growing?
Companies with falling earnings are riskier for dividend shareholders. If earnings decline and the company is forced to cut its dividend, investors could watch the value of their investment go up in smoke. That's why it's not ideal to see Singapore Land Group's earnings per share have been shrinking at 3.1% a year over the previous five years.
The main way most investors will assess a company's dividend prospects is by checking the historical rate of dividend growth. Singapore Land Group has delivered an average of 2.9% per year annual increase in its dividend, based on the past 10 years of dividend payments.