There's A Lot To Like About DBS Group Holdings' (SGX:D05) Upcoming S$0.54 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. The ex-dividend date is usually set to be one business day before the record date which is the cut-off date on which you must be present on the company's books as a shareholder in order to receive the dividend. The ex-dividend date is an important date to be aware of as any purchase of the stock made on or after this date might mean a late settlement that doesn't show on the record date. Accordingly, DBS Group Holdings investors that purchase the stock on or after the 15th of August will not receive the dividend, which will be paid on the 26th of August.

The company's next dividend payment will be S$0.54 per share. Last year, in total, the company distributed S$2.16 to shareholders. Based on the last year's worth of payments, DBS Group Holdings has a trailing yield of 6.4% on the current stock price of S$33.57. If you buy this business for its dividend, you should have an idea of whether DBS Group Holdings's dividend is reliable and sustainable. So we need to investigate whether DBS Group Holdings can afford its dividend, and if the dividend could grow.

View our latest analysis for DBS Group Holdings

Dividends are typically paid out of company income, so if a company pays out more than it earned, its dividend is usually at a higher risk of being cut. DBS Group Holdings paid out more than half (54%) of its earnings last year, which is a regular payout ratio for most companies.

Companies that pay out less in dividends than they earn in profits generally have more sustainable dividends. The lower the payout ratio, the more wiggle room the business has before it could be forced to cut the dividend.

Click here to see the company's payout ratio, plus analyst estimates of its future dividends.

Have Earnings And Dividends Been Growing?

Businesses with strong growth prospects usually make the best dividend payers, because it's easier to grow dividends when earnings per share are improving. Investors love dividends, so if earnings fall and the dividend is reduced, expect a stock to be sold off heavily at the same time. For this reason, we're glad to see DBS Group Holdings's earnings per share have risen 14% per annum over the last five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. DBS Group Holdings has delivered an average of 16% per year annual increase in its dividend, based on the past 10 years of dividend payments. It's great to see earnings per share growing rapidly over several years, and dividends per share growing right along with it.

Final Takeaway

Is DBS Group Holdings worth buying for its dividend? Earnings per share are growing at an attractive rate, and DBS Group Holdings is paying out a bit over half its profits. We think this is a pretty attractive combination, and would be interested in investigating DBS Group Holdings more closely.

In light of that, while DBS Group Holdings has an appealing dividend, it's worth knowing the risks involved with this stock. Every company has risks, and we've spotted 2 warning signs for DBS Group Holdings you should know about.

If you're in the market for strong dividend payers, we recommend checking our selection of top dividend stocks.

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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.