There's A Lot To Like About UOB-Kay Hian Holdings' (SGX:U10) Upcoming S$0.092 Dividend

UOB-Kay Hian Holdings Limited (SGX:U10) stock is about to trade ex-dividend in four days. 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. 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. Thus, you can purchase UOB-Kay Hian Holdings' shares before the 7th of May in order to receive the dividend, which the company will pay on the 26th of June.

The company's upcoming dividend is S$0.092 a share, following on from the last 12 months, when the company distributed a total of S$0.092 per share to shareholders. Calculating the last year's worth of payments shows that UOB-Kay Hian Holdings has a trailing yield of 6.5% on the current share price of S$1.41. We love seeing companies pay a dividend, but it's also important to be sure that laying the golden eggs isn't going to kill our golden goose! That's why we should always check whether the dividend payments appear sustainable, and if the company is growing.

View our latest analysis for UOB-Kay Hian Holdings

If a company pays out more in dividends than it earned, then the dividend might become unsustainable - hardly an ideal situation. Fortunately UOB-Kay Hian Holdings's payout ratio is modest, at just 48% of profit.

When a company paid out less in dividends than it earned in profit, this generally suggests its dividend is affordable. The lower the % of its profit that it pays out, the greater the margin of safety for the dividend if the business enters a downturn.

Click here to see how much of its profit UOB-Kay Hian Holdings paid out over the last 12 months.

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. If earnings fall far enough, the company could be forced to cut its dividend. Fortunately for readers, UOB-Kay Hian Holdings's earnings per share have been growing at 15% a year for the past five years.

Many investors will assess a company's dividend performance by evaluating how much the dividend payments have changed over time. UOB-Kay Hian Holdings has delivered an average of 3.5% per year annual increase in its dividend, based on the past 10 years of dividend payments. It's good to see both earnings and the dividend have improved - although the former has been rising much quicker than the latter, possibly due to the company reinvesting more of its profits in growth.

To Sum It Up

From a dividend perspective, should investors buy or avoid UOB-Kay Hian Holdings? Companies like UOB-Kay Hian Holdings that are growing rapidly and paying out a low fraction of earnings, are usually reinvesting heavily in their business. This strategy can add significant value to shareholders over the long term - as long as it's done without issuing too many new shares. Overall, UOB-Kay Hian Holdings looks like a promising dividend stock in this analysis, and we think it would be worth investigating further.

On that note, you'll want to research what risks UOB-Kay Hian Holdings is facing. In terms of investment risks, we've identified 2 warning signs with UOB-Kay Hian Holdings and understanding them should be part of your investment process.

A common investing mistake is buying the first interesting stock you see. Here you can find a full list of high-yield 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.