DBS Group Holdings Ltd (SGX:D05) Looks Interesting, And It's About To Pay A Dividend

Readers hoping to buy DBS Group Holdings Ltd (SGX:D05) for its dividend will need to make their move shortly, as the stock is about to trade ex-dividend. Typically, the ex-dividend date is one business day before the record date which is the date on which a company determines the shareholders eligible to receive a dividend. 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. Therefore, if you purchase DBS Group Holdings' shares on or after the 14th of November, you won't be eligible to receive the dividend, when it is paid on the 25th of November.

The company's next dividend payment will be S$0.54 per share, and in the last 12 months, the company paid a total of S$2.16 per share. Looking at the last 12 months of distributions, DBS Group Holdings has a trailing yield of approximately 5.1% on its current stock price of S$42.75. Dividends are an important source of income to many shareholders, but the health of the business is crucial to maintaining those dividends. So we need to check whether the dividend payments are covered, and if earnings are growing.

See our latest analysis for DBS Group Holdings

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. DBS Group Holdings paid out more than half (55%) of its earnings last year, which is a regular payout ratio for most companies.

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?

Companies with consistently growing earnings per share generally make the best dividend stocks, as they usually find it easier to grow dividends per share. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, DBS Group Holdings's earnings per share have been growing at 14% a year for the past five years.

Another key way to measure a company's dividend prospects is by measuring its historical rate of dividend growth. In the past 10 years, DBS Group Holdings has increased its dividend at approximately 15% a year on average. It's exciting to see that both earnings and dividends per share have grown rapidly over the past few years.

To Sum It Up

Is DBS Group Holdings an attractive dividend stock, or better left on the shelf? Earnings per share are growing nicely, and DBS Group Holdings is paying out a percentage of its earnings that is around the average for dividend-paying stocks. Overall, DBS Group Holdings looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

In light of that, while DBS Group Holdings has an appealing dividend, it's worth knowing the risks involved with this stock. To help with this, we've discovered 1 warning sign for DBS Group Holdings that you should be aware of before investing in their shares.

Generally, we wouldn't recommend just buying the first dividend stock you see. Here's a curated list of interesting stocks that are strong dividend payers.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.