Of course, some might argue that given that this year is such a bad year for the economy, the profits of SPH may drop. If you read the annual report for 2008, it may seem to give you the impression that the profits for SPH may drop indeed since it has a lower EPS in 2008 than 2007. I did not study the financials of SPH in detail but a quick glance at the financials of SPH reveals that the drop in EPS is mainly attributed to investment. However, the business operations is still profitable with a higher revenue for 2008 as compared to 2007 and this is significant and the main source of revenue which is advertisement, is still increasing in 2008 despite the economic recession. To add on, SPH has a policy of paying dividends based on their recurring profits i.e. profits from their business operations. Thus I believe there is a good chance that SPH will be maintaining the same amount of dividend this year. Even if the dividend drops, I don't think it will drop that much. Even if the dividend drops to $0.20 per share, the dividend yield is still at around 7.4%.
Thursday, February 12
SPH's dividend yield
Posted by
Kay
at
Thursday, February 12, 2009
A friend of mine was asking me about whether I know about the dividend of SPH. I went to check on how much dividend did SPH distribute last year. In 2008, SPH distributed $0.27 worth of dividend per year. SPH is currently trading around $2.7 and as of today, it closed at $2.65. Thus assuming that SPH will still distribute $0.27 worth of dividend for this year and the buying price of $2.65, the dividend yield is around 10.9%. At this yield, SPH definitely looks very attractive to me.
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Hi Kay,
ReplyDeleteHowever SPH shares have been dropping and might not seem to have bottom. While its not in a sunset industry, the revenue is likely to be stagnating for a while. I am not sure whether they can maintain the dividends.
Hi DB10,
ReplyDeleteI'm not that sure too whether they can maintain the dividend. I do think that there is a chance they can maintain it too. I feel that SPH is one of the overlooked counters on SGX due to the notion that print media is on the decline and advertisements are falling. In my humble opinion, the numbers in the financials seem to be singing a different tune.
Regards
Kay
Hi,
ReplyDeleteThink SPH is in a mature industry, even to the extent of saying its nearly a sunset industry.
SPH's print is based on information that allows them to charge for advertisements. So basically, they are competing with Google in some ways. The internet is proliferating...think this would seriously impact SPH.
So SPH has moved digitally...Channelnewasia is a good substitute. Google news local is also a good substitute.
Handhelds phones with internets access is getting common too....
All this seismic shifts...will definitely impact SPH in time to come, especially with the younger generations getting more savvy technologically.
Its justified that their share price go down reflect this.
SGDividends Team
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ReplyDeleteHi SGDividends,
ReplyDeleteIn time to come, I'm also rather pessimistic on the outlook of the traditional print media industry. Perhaps it would take a decade or two for this to change. Meanwhile, in the very short term, I am rather heartened by the fact the revenue from advertisements have increased significantly in 2008 as compared to 2007 despite the fact that we are in a recession now.
Kay
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