Tai Sin Electric: Nibbling for a 6.3% to 6.5% yield.

I was first introduced to Tai Sin Electric by a guest panelist, Paul Chen, at the third "Evening with AK and friends". This was sometime at the end of March. I did some research into the company and also came across a well written article dated 24 Sep 2014 by Sean Seah. 

Since Sean's publication of his article, Tai Sin has paid dividend twice, 1.5c a share on 6 November 2014 and 0.75c a share on 25 March 2015. Having paid 2.25c a share in yearly dividends in the prior 2 years as well, it would seem that this could be the norm for Tai Sin Electric in the coming years, conditions permitting.

Looking at their half yearly results announcement on 11 Feb 2015, the EPS was 2.44c and if we were to expect similar performance in the following 6 months, then, full year EPS would be 4.88c. With a DPS of 2.25c, the pay-out ratio is 46%. This is pretty comfortable.

NAV per share has also grown as Tai Sin Electric retains a relatively big portion of earnings. NAV per share at the end of 2014 was 33.46c. This could possibly grow to 36c or so by middle of this year as I do not expect another dividend to be announced in that time, based on the timing of past pay-outs.

Visit Tai Sin Electric's newsroom: here.

Tai Sin Electric's share price has declined in the last few months since touching a high of 40c in September 2014. Looking at the charts, it seems that 34.5c could be the support to watch as the downtrend was broken in the second half of January 2015 and the share price could stay range bound for months until the next dividend announcement later in the year.

I believe that paying 34.5c to 35.5c a share for Tai Sin Electric is to pay a fair price to be a shareholder of a business that provides a combination of growth and income. If the support identified at 34.5c should break, then, the next band of supports are found at 32.5c, 32c and 31c. If they should be tested, I would probably be accumulating.