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The Only Blue-Chip Stock Paying Dividends This Week

There is one company that is part of the Straits Times Index  (SGX: ^STI) that will be going ex-dividend on Wednesday. In other words, you need to own the company’s shares before that day if you want to receive its dividends.

And, the company is none other than stock market operator and regulator, Singapore Exchange Limited  (SGX: S68).

Singapore Exchange is paying 13 cents for the fourth-quarter of its fiscal year ended 30 June 2016 (FY2016). The company posted its results for FY2016 around the end of July this year.

Singapore Exchange reported a 5% increase in revenue to S$818 million. Its net profit was flat S$349 million – consequently, Singapore Exchange’s earnings per share was unchanged at 32.6 cents.

The firm has three business segments and the table below shows their respective revenue contributions in FY2016:

sgx-segment-table-sudhan
Source: Singapore Exchange’s earnings report

Revenue from Equities and Fixed Income makes up the bulk of the company’s total revenue at 49.6%. In this segment, Singapore Exchange  “provides the entire value chain of services for the Singapore securities market, from facilitation of capital raising to enabling trading, clearing and settlement of shares and other listed instruments.”

In FY2016, there were a total of 21 new equity and trust listings which raised S$2.1 billion. This contrasts with the previous year’s 34 listings which raised S$2.7 billion. The number of bond listings also fell – there were 349 bond listings in FY2016 (raising S$172 billion), compared to 487 in FY2015 (raising S$184.8 billion).

The table below shows Singapore’s’s history of dividends. Over the company’s last eight financial years,  it has been either maintained or increased its annual dividend.

sgx-dividend-table-sudhan
Source: Singapore Exchange’s investor relations website

Singapore Exchange’s dividend payout ratio for FY2016 stood at 86%. This is what the company said in its FY2016 annual report about its dividend for FY2017:

“For FY2017, the Board aims to declare a base dividend of 5 cents per share every quarter. For each financial year, the Board aims to pay, as dividend, an amount which is no less than (a) 80% of the annual net profit after tax; or (b) 20 cents per share, whichever is higher. The difference between the targeted dividend and the interim base dividend will be declared and paid as final dividend of each financial year.”

Singapore Exchange’s shares closed at S$7.48 each on Friday. The company is valued at 23 times trailing earnings and has a trailing dividend yield of 3.7%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Singapore Exchange. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.