One of the best ways companies can put a smile on shareholders’ faces is to write them bigger dividend checks. After all, who would ever say no to a growing income (assuming of course, that the company’s dividends are sustainable)? So, let’s take a look at some companies that, in the past week, have declared a fatter pay check to shareholders in a bid to bring more smiles. Azeus Technology (SGX: A69) The company, a provider of Information-Technology consultancy services that is headquartered in Hong Kong, has operations in Singapore, China (Dalian), Philippines (Manila) and UK (London). Last week,…
One of the best ways companies can put a smile on shareholders’ faces is to write them bigger dividend checks. After all, who would ever say no to a growing income (assuming of course, that the company’s dividends are sustainable)?
So, let’s take a look at some companies that, in the past week, have declared a fatter pay check to shareholders in a bid to bring more smiles.
Azeus Technology (SGX: A69)
The company, a provider of Information-Technology consultancy services that is headquartered in Hong Kong, has operations in Singapore, China (Dalian), Philippines (Manila) and UK (London). Last week, Azeus had posted a 200% increase in full year profit from HK$10.4m a year ago to HK$31.1m.
The two-fold increase in earnings was mainly due to the award of HK$40.9m in compensation for winning an arbitration case involving the company and one of its customers in a contract-dispute. Because of that, the company was able to announce dividends of 10.38 HK cents per share for the recently completed financial year, a 200% jump from the dividends of the previous year.
Interestingly, the company, with a tiny market capitalization of S$30m, has been paying out 100% of its profits as dividends since the financial year ended March 2007.
Azeus’ shares are currently trading at S$0.1150, which equates to a Price-Earnings ratio of 6.8 and a huge dividend yield of 14.7% that is more than four times the Straits Times Index’s (SGX: ^STI) yield of around 2.7%.
Tat Hong Holdings (SGX: T03)
Tat Hong Holdings’ full-year earnings release last week must have brightened shareholders’ mood with its 67% jump in annual profits to S$70.4m along with the icing on the cake – a 60% increase in dividends per share from 2.5 cents to 4.0 cents.
The company’s principle activity lies with owning and leasing-out cranes and it holds the distinction of being Asia-Pacific’s largest crane-owning company. In addition, it also has interests in China-based and locally-listed tower-crane company, Yong Mao Holdings (SGX: E6A).
Tat Hong’s business seems cyclical as its profits peaked in the financial year ended March 2008 at S$89.8m. It then started a steady descent that bottomed with the financial year ended March 2011 at S$26m. Since then, the company’s earnings have almost tripled to the recently announced S$70.4m.
With its current share price of S$1.49, potential investors are paying S$12.8 for every dollar of the company’s earnings and would be getting a dividend yield of 2.7%.
United Envirotech (SGX: U19)
United Envirotech’s a water treatment solutions provider specializing in membrane-based technology and its latest full-year results treated shareholders to a refreshing blend of huge top-line, bottom-line and dividend growth.
Revenue for the company had more than doubled from S$85.3m a year ago to S$185m and the growth trickled down to the bottom-line, where United Envirotech posted a near-tripling in profit from S$10.5m to S$31m. The strong profits allowed the company to dish out larger dividends and shareholders can look forward to a pay-out of 0.5 cents per share, two-thirds higher than the previous year’s 0.3 cents dividend.
The company has targeted China as its long-term growth play and is riding a wave of increased Chinese-government spending on environment and water-related projects.
Shares of the company have a PE ratio of 14.3 and dividend yield of 0.5% at the current price of S$0.92.
Biosensors (SGX: B20)
Rounding up our list today is a new kid on the block for dividend-paying shares, Biosensors. The maker of drug-eluting stents (a medical device used to unclog blocked arteries) announced its first ever dividend of US$0.02 per share in its full-year earnings release last week. With a share price of S$1.16, that amounts to a dividend yield of around 2.2%.
Biosensors’ recent full-year results saw a scary plunge in earnings of 70% from US$364.3m to US$115.4m. But, the drop was due to a huge one-off gain in the previous year amounting to US$279.6m, stemming from revaluations of its acquisitions.
If earnings had been normalized by removing the distorting effects of such one-time charges, the company’s profits would actually have seen a 10.5% year-on-year increase from US$101m to US$111.6m.
In any case, long-time shareholders who have stuck with the company through its loss-making years in the financial year ended March 2006 till March 2009 would finally have some other form of return to show for their tenacity besides capital appreciation in share price.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Chong Ser Jing doesn’t own shares in any companies mentioned.