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14 Years of Growing Dividends

The conglomerate Jardine Matheson Holdings (SGX: J36) is one of the mainstays of Singapore’s stock market benchmark the Straits Times Index (SGX: ^STI), accounting for close to 6% of the index’s movement. And, I had previously written about how the company had displayed 9 consecutive years of dividend growth from 2003 to 2012.

A remarkable history of growing dividends

Turns out, it’s a record that stretches even further back in time – 14 years to be exact (with a little wrinkle which I shall touch upon soon). The company paid a dividend of US$0.216 per share back in 1998 and 14 years later, in 2012, its pay-out had grown by some 525% to US$1.35 a share.

Here’s its dividend history:

Year

Dividends per share in US$

1998

0.216

1999

0.25

2000

0.265

2001

0.265

2002

0.30

2003

0.33

2004

0.40

2005

0.45

2006

0.50

2007

0.65

2008

0.75

2009

0.90

2010

1.15

2011

1.25

2012

1.35

Source: S&P Capital IQ

We can see that, apart from 2001 where it maintained its dividends (the little wrinkle I mentioned earlier), it has actually had a rather unblemished record of consecutive dividend increases for more than a decade.

What exactly is Jardine Matheson Holdings?

As I’ve written before, Jardine Matheson Holdings is a conglomerate with extremely diverse business interests through its ownership stakes in privately-held, as well as publicly-listed companies.

These stakes include the wholly-owned subsidiaries Jardine Pacific and Jardine Motors; London-listed Jardine Lloyd Thompson (LSE: JLT); Singapore-listed Jardine Strategic Holdings (SGX: J37), Jardine Cycle & Carriage (SGX: C07), Dairy Farm International Holdings (SGX: D01), Hongkong Land (SGX: H78), and Mandarin Oriental (SGX: M04); and finally, Indonesia-listed Astra International.

Future of its dividends

Looking at the table above, I guess it’s only natural to ask what comes next. A quick glance at the company’s numbers showed that its dividend for the first half of 2013, at US$0.37 per share, was actually 6% higher than that in the corresponding period in 2012.

Jardine Matheson Holdings’ underlying profit – a “key measure which provides additional information to enhance understanding of [Jardine Matheson’s] underlying business performance”, according to the company’s annual report –  had also grown 7% year-on-year to US$753m for the six months ended 30 June 2013.

In the second half of 2012, Jardine Matheson Holdings declared a dividend of US$1.00 a share. If it could maintain that for the second half of 2013, then it will be able to notch up another consecutive year of dividend-growth.

The company’s interim management statement, for the period covering 1 July 2013 to 5 Nov 2013, revealed that its underlying profit “remain broadly in line with last year” while seeing improvements in its balance sheet with a slightly-reduced net debt load. Those are pretty good signs, but as it is, no one knows the future for sure.

Foolish Bottom Line

Jardine Matheson Holdings’ dividend history does look great and history can often be a useful – not certain – indicator of the future.

But, investors should also bear in mind that an understanding of its various businesses and their probable-futures would be as equally (perhaps even more) important as its history in giving clues about its dividends in the years ahead.

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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 writer Chong Ser Jing doesn’t own shares in any companies mentioned.