Singapore Exchange (SGX:S68) Is Paying Out A Dividend Of SGD0.08

The board of Singapore Exchange Limited (SGX:S68) has announced that it will pay a dividend on the 15th of May, with investors receiving SGD0.08 per share. Based on this payment, the dividend yield will be 3.3%, which is fairly typical for the industry.

Check out our latest analysis for Singapore Exchange

Singapore Exchange's Payment Has Solid Earnings Coverage

We like to see a healthy dividend yield, but that is only helpful to us if the payment can continue. The last dividend was quite easily covered by Singapore Exchange's earnings. This means that a large portion of its earnings are being retained to grow the business.

Looking forward, earnings per share is forecast to rise by 0.8% over the next year. If the dividend continues on this path, the payout ratio could be 67% by next year, which we think can be pretty sustainable going forward.

Singapore Exchange Has A Solid Track Record

The company has been paying a dividend for a long time, and it has been quite stable which gives us confidence in the future dividend potential. Since 2013, the annual payment back then was SGD0.27, compared to the most recent full-year payment of SGD0.32. This works out to be a compound annual growth rate (CAGR) of approximately 1.7% a year over that time. While the consistency in the dividend payments is impressive, we think the relatively slow rate of growth is less attractive.

We Could See Singapore Exchange's Dividend Growing

The company's investors will be pleased to have been receiving dividend income for some time. We are encouraged to see that Singapore Exchange has grown earnings per share at 8.3% per year over the past five years. Shareholders are getting plenty of the earnings returned to them, which combined with strong growth makes this quite appealing.

We Really Like Singapore Exchange's Dividend

Overall, we like to see the dividend staying consistent, and we think Singapore Exchange might even raise payments in the future. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All of these factors considered, we think this has solid potential as a dividend stock.

Companies possessing a stable dividend policy will likely enjoy greater investor interest than those suffering from a more inconsistent approach. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Companies that are growing earnings tend to be the best dividend stocks over the long term. See what the 12 analysts we track are forecasting for Singapore Exchange for free with public analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our collection of 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.