Credit Bureau Asia (SGX:TCU) Is Paying Out A Larger Dividend Than Last Year

The board of Credit Bureau Asia Limited (SGX:TCU) has announced that it will be paying its dividend of SGD0.02 on the 24th of May, an increased payment from last year's comparable dividend. Based on this payment, the dividend yield for the company will be 4.3%, which is fairly typical for the industry.

Check out our latest analysis for Credit Bureau Asia

Credit Bureau Asia's Earnings Easily Cover The Distributions

We aren't too impressed by dividend yields unless they can be sustained over time. Before making this announcement, Credit Bureau Asia was easily earning enough to cover the dividend. This means that most of its earnings are being retained to grow the business.

Over the next year, EPS is forecast to expand by 28.8%. If the dividend continues on this path, the payout ratio could be 58% by next year, which we think can be pretty sustainable going forward.

Credit Bureau Asia Doesn't Have A Long Payment History

The dividend has been pretty stable looking back, but the company hasn't been paying one for very long. This makes it tough to judge how it would fare through a full economic cycle. Since 2021, the annual payment back then was SGD0.034, compared to the most recent full-year payment of SGD0.04. This implies that the company grew its distributions at a yearly rate of about 5.6% over that duration. Investors will likely want to see a longer track record of growth before making decision to add this to their income portfolio.

We Could See Credit Bureau Asia's Dividend Growing

Investors who have held shares in the company for the past few years will be happy with the dividend income they have received. Credit Bureau Asia has impressed us by growing EPS at 9.5% per year over the past five years. Credit Bureau Asia definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

We Really Like Credit Bureau Asia's Dividend

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Earnings are easily covering distributions, and the company is generating plenty of cash. All in all, this checks a lot of the boxes we look for when choosing an income stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. As an example, we've identified 1 warning sign for Credit Bureau Asia that you should be aware of before investing. Is Credit Bureau Asia not quite the opportunity you were looking for? Why not check out 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.