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SingPost posts sinking dividends.

Monday, July 24, 2017

Reader:
I am a sad shareholder of Singpost. Final dividend is 0.5 cent. Should I continue to hold and wait for improvement?


Suspicious looking package at 

Singapore Post mail processing centre.


AK:
Those who thought they would continue to get 7c a year were delusional. I also said those who were expecting a reduced dividend per share (DPS) of 4.2c to 5.6c a year could be disappointed.

Now, we could see an annual DPS of only 2c. If you are still expecting a 5% dividend yield, it is quite depressing.

In my earlier blog on SingPost where I wondered what price I might pay to be a shareholder, I made some assumptions which gave me what I thought was a more realistic DPS of 3c.

A more than 70% reduction in DPS from 7c to 2c is a tough one to swallow for any investor for income. Imagine a retiree who has SingPost as his largest investment in his portfolio.


How much do I think is a fair price to pay for SingPost now? 

You might want to read the related post below for an idea.

Related post:
An incomplete analysis of SingPost.

"Since SingPost is going to pay at least 60% of earnings as dividend, we would get a 3% yield at $1.00 a share, using the assumption in this blog which gives us a DPS of about 3c."

4 comments:

Laurence said...

The total dividend for this calendar year (2017) looks more like 0.5c x 4 = 2c?
Maybe even lower if they pay even less for 2H17.

Sillyinvestor said...

Singpost price resilience is disappointing lei AK.
Because it buy back. I was hoping everyone think they it's only worth $1 and after it's impairment, see some blood. It's just a gaze lor

AK71 said...

Hi Laurence,

It would very much depend on earnings since SingPost has guided a dividend payout ratio of 60%.

AK71 said...

Hi Mike,

This is another confirmation that the management is mediocre because I believe that the share buy back is a poor use of funds.

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