The oldest telco in Singapore has been issuing dividends ever since the turn of the millennium. Heres all you need to know about its payouts and whether youre getting your capitals worth.
To say that Singtel is a household name is a gross understatement. The company has been plying its trade ever since the late-1800s, even having a stranglehold on the local telco scene until the Government deregulated the industry in 1997.
By then, Singtel was already a publicly-listed company on the SGX and would begin issuing dividends three years later.
Fast-forward to 2021 and things are a lot more complex for the red team. Intense competition and Covid-19 are two of the biggest spanners in Singtels works but the firm has held firm and proceeded with its dividend payouts even in 2020 and 2021.
Financial institutions like DBS and OCBC have given their stamp of approval as well, predicting a bullish 2021 for the telco.
If you would like to weave Singtel into your dividend portfolio or already possess shares in the company, heres the full lowdown before you put your money down.
How much will I receive?
|Cash (Interim Ordinary Dividend 2021)||Shares (Singtel Scrip Dividend Scheme)|
|$0.051/share||Receive shares at a price of $2.422 each|
Your slice of the pie is important and Singtel knows it. Its first dividend payout in 2021 amounted to $833 million, or 5.1 cents per share.
The STI constituent distributed close to 100 per cent of its underlying net profit from April September 2020 to shareholders despite the novel coronavirus battering economies worldwide.
In a pre-Covid-19 world however, dividends were consistently clocking in at above 15 cents per share.
Singtel also launched its own scrip dividend scheme in 2021, giving investors the opportunity to receive payouts in the form of shares rather than cash.
For example, if you were holding on to 1000 lots in Singtel and opted into the scheme, you wouldve received 21 shares based on the scrip price of $2.422. Thats a $0.07 discount per share based on how much Singtel was trading at on the day it paid its dividends out.
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What is the dividend payout schedule like?
|Interim Dividend Payment (annual)||Final Dividend Payment (annual)||Other Dividend Payments (ad-hoc)|
|Mid-January||Mid-August||Late-August (Special Dividend 2011)Mid-January (Special Dividend 2018)|
Now that you know how much youll receive as a shareholder, whip out your calendars because youll need to note down when Singtel pays its dividends out. Expect to receive two payments from the telco every year:
1. In January after it consolidates its performance for the financial years first half
2. In August after wrapping up its AGM
With regards to ad-hoc payments, the company distributed a special dividend in August 2011 and January 2018.
The former was due to Singtel having a lack of suitable acquisition opportunities. Fortunately, the latter came on the back of good news as Singtel celebrated a record net profit in the second quarter of 2017.
What risks do I face?
Although Singtel appears to be the embodiment of consistency, its shares arent exactly bulletproof. This is no different from any other investment, be it precious metals or robo-advisors. Furthermore, competition among telcos is stiff, with Singtel battling on multiple fronts against its traditional rivals and an increasing number of MVNOs.
As a result, its share price has been dropping ever since it hit record highs in 2015. In fact, the very opposite was observed, with record lows nearly seen in October 2020.
Singapores vaccination programme may accelerate the companys rebound in 2021 but its regional investments will take time to recover. Naturally, theres also the worry that it might never hit its all-time high again, much less surpass it.
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What does the future hold for Singtel?
Its no secret that Singtel would like to recapture the same mojo that brought it remarkable growth from 2006 – 2007 and 2009 – 2015. In a bid to do just that, the firm recently announced an organisational restructure.
The move aims to capitalise on its commanding 5G presence in Singapore and allows it to discover new growth opportunities in the region.
Hows this relevant to shareholders, you say? Should Singtel successfully stop the bleeding and go on a sustained bull run after the global population has been sufficiently vaccinated, expect to receive a more handsome dividend payout.
And if its organisational restructuring allows it to experience long-term growth again, youll have a blue chip worth holding onto.
|Dividend Yield (2011-2020)||Amount Per Share (2011-2020)||Share Price (2011-2020)|
|Ranged from 4.4 10.75 per cent||Ranged from 10.6 25.8 cents per share||Ranged from $2 to $4.57|
For new and veteran investors alike, Singtel is a company worth considering. The telco has been operating for over a century and publicly-listed on the SGX for more than 20 years. This has translated into a dividend yield that never dipped below 4.4 per cent, even during a pandemic and recession.
The landscape might be challenging for Singtel locally and regionally, but history has demonstrated that you can rely on it for a consistent dividend payout. Consider adding this stock to your dividend portfolio if youre lacking a telco or a blue chip in the Singapore market.
This article was first published in SingSaver.com.sg.