Yahoo Finance Credit Bureau Asia (SGX:TCU) Will Pay A Dividend Of SGD0.02
Credit Bureau Asia Limited (SGX:TCU) has announced that it will pay a dividend of SGD0.02 per share on the 24th of May. This means that the annual payment will be 4.3% of the current stock price, which is in line with the average for the industry.
Check out our latest analysis for Credit Bureau Asia
Credit Bureau Asia's Payment Has Solid Earnings Coverage
We aren't too impressed by dividend yields unless they can be sustained over time. The last payment made up 86% of earnings, but cash flows were much higher. In general, cash flows are more important than earnings, so we are comfortable that the dividend will be sustainable going forward, especially with so much cash left over for reinvestment.
The next year is set to see EPS grow by 32.6%. Assuming the dividend continues along the course it has been charting recently, our estimates show the payout ratio being 67% which brings it into quite a comfortable range.
Credit Bureau Asia Is Still Building Its Track Record
The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 3 years, which isn't that long in the grand scheme of things. The annual payment during the last 3 years was SGD0.034 in 2021, and the most recent fiscal year payment was SGD0.04. This implies that the company grew its distributions at a yearly rate of about 5.6% over that duration. Investors will likely want to see a longer track record of growth before making decision to add this to their income portfolio.
We Could See Credit Bureau Asia's Dividend Growing
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Credit Bureau Asia has impressed us by growing EPS at 9.0% per year over the past five years. The payout ratio is very much on the higher end, which could mean that the growth rate will slow down in the future, and that could flow through to the dividend as well.
Our Thoughts On Credit Bureau Asia's Dividend
Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. In the past, the payments have been unstable, but over the short term the dividend could be reliable, with the company generating enough cash to cover it. Overall, we don't think this company has the makings of a good income stock.
Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Taking the debate a bit further, we've identified 2 warning signs for Credit Bureau Asia that investors need to be conscious of moving forward. If you are a dividend investor, you might also want to look at our curated 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.
