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Reader:
I am a sad shareholder of Singpost. Final dividend is 0.5 cent. Should I continue to hold and wait for improvement?
Suspicious looking package at
Singapore Post mail processing centre.
AK:
Those who thought they would continue to get 7c a year were delusional. I also said those who were expecting a reduced dividend per share (DPS) of 4.2c to 5.6c a year could be disappointed.
Now, we could see an annual DPS of only 2c. If you are still expecting a 5% dividend yield, it is quite depressing.
In my earlier blog on SingPost where I wondered what price I might pay to be a shareholder, I made some assumptions which gave me what I thought was a more realistic DPS of 3c.
A more than 70% reduction in DPS from 7c to 2c is a tough one to swallow for any investor for income. Imagine a retiree who has SingPost as his largest investment in his portfolio.
How much do I think is a fair price to pay for SingPost now?
You might want to read the related post below for an idea.
Related post:
An incomplete analysis of SingPost.
"Since SingPost is going to pay at least 60% of earnings as dividend, we would get a 3% yield at $1.00 a share, using the assumption in this blog which gives us a DPS of about 3c."
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4 comments:
The total dividend for this calendar year (2017) looks more like 0.5c x 4 = 2c?
Maybe even lower if they pay even less for 2H17.
Singpost price resilience is disappointing lei AK.
Because it buy back. I was hoping everyone think they it's only worth $1 and after it's impairment, see some blood. It's just a gaze lor
Hi Laurence,
It would very much depend on earnings since SingPost has guided a dividend payout ratio of 60%.
Hi Mike,
This is another confirmation that the management is mediocre because I believe that the share buy back is a poor use of funds.
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