3 Key Things Investors Should Know About Sheng Siong Group Ltd’s Dividend

Sheng Siong Group Ltd (SGX: OV8) might be a recognisable company for many in Singapore since it is one of the largest supermarket chains here. The company’s network of 39 of its namesake stores are primarily located in the heartlands of our Garden City.

Sheng Siong is also a regular payer of dividends. The retailer’s latest annual report had four key things related to its dividend that investors might want to know:

1) Revenue and earnings per share (EPS) are rising

Sheng Siong revenue and earnings per share chart
Source: Sheng Siong’s annual report

Revenue is the starting point for a viable business. In this regard, Sheng Siong has done well as its revenue has increased by 7% per year over the past five years. The same goes for its EPS; the supermarket operator’s EPS was up over 14% annually during the same period.

2) A commitment to dividends

Sheng Siong did not list down an official dividend policy in its latest annual report. But, Lim Hock Eng, Sheng Siong’s chairman, did have this to say about the company’s 2015 dividend:

“The Board has recommended a final cash dividend of 1.75 cents per share to reward shareholders for their continued support, taking our total dividend for FY2015 to 3.5 cents per share. The total payout amounted to about 92.6% of our net profit after tax, which was higher than our commitment of up to 90% for FY2015 and FY2016.”

As you can see, Sheng Siong has committed to payout the majority of its net profit for 2016 as a dividend.

3) Historical dividend per share

Sheng Siong was listed on Singapore’s stock market in 2011. It paid a dividend of S$0.0177 per share in that year and has since nearly doubled its dividend to S$0.035 per share in 2015.

The three points above serve as a starting point for studying Sheng Siong’s dividend. Other areas worth looking into include its balance sheet and the amount of free cash it generates.

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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 Chin Hui Leong doesn’t own shares in any companies mentioned.