Singapore Land Group (SGX:U06) Is Paying Out A Larger Dividend Than Last Year

Yahoo

07-04-2025

Singapore Land Group Limited (SGX:U06) will increase its dividend on the 28th of May to SGD0.045, which is 13% higher than last year's payment from the same period of SGD0.04. Even though the dividend went up, the yield is still quite low at only 2.4%.
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Even a low dividend yield can be attractive if it is sustained for years on end. However, prior to this announcement, Singapore Land Group's dividend was comfortably covered by both cash flow and earnings. As a result, a large proportion of what it earned was being reinvested back into the business.
EPS is set to fall by 14.0% over the next 12 months if recent trends continue. Assuming the dividend continues along recent trends, we believe the payout ratio could be 27%, which we are pretty comfortable with and we think is feasible on an earnings basis.
View our latest analysis for Singapore Land Group
Even over a long history of paying dividends, the company's distributions have been remarkably stable. The dividend has gone from an annual total of SGD0.03 in 2015 to the most recent total annual payment of SGD0.045. This means that it has been growing its distributions at 4.1% per annum over that time. Although we can't deny that the dividend has been remarkably stable in the past, the growth has been pretty muted.
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. However, things aren't all that rosy. Over the past five years, it looks as though Singapore Land Group's EPS has declined at around 14% a year. Such rapid declines definitely have the potential to constrain dividend payments if the trend continues into the future.
In summary, it's great to see that the company can raise the dividend and keep it in a sustainable range. The earnings coverage is acceptable for now, but with earnings on the decline we would definitely keep an eye on the payout ratio. The dividend looks okay, but there have been some issues in the past, so we would be a little bit cautious.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. For example, we've identified 2 warning signs for Singapore Land Group (1 makes us a bit uncomfortable!) that you should be aware of before investing. Is Singapore Land Group not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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