4 Quick Things to Know About StarHub Ltd’s Dividend

StarHub Ltd (SGX: CC3) may be a recognisable company for many investors in Singapore. That’s because it’s the second largest operational telecommunications services provider here in Singapore, sitting in between the leader Singapore Telecommunications Limited (SGX: Z74) and the third-placed M1 Ltd (SGX: B2F).

Investors may also recognise StarHub due to the fact it is a regular payer of dividends. The telco’s latest 2016 annual report had four key pieces of information related to its dividend that investors may want to know:

1. Revenue has been flat in recent years

Here’s a chart showing StarHub’s total revenue in each year from 2012 to 2016:

Source: StarHub’s annual report

Revenue is the starting point of a viable business. StarHub has not managed to grow its revenue in the past five years. In fact, its revenue in 2016 was 1.9% lower than in 2015 and 1.5% lower than in 2012.

2. But earnings per share have fallen

The chart below shows StarHub’s earnings per share for 2012 to 2016:

Source: StarHub’s annual report

StarHub’s earnings per share (EPS) was essentially flat between 2012 and 2015. But from the chart above, we can see that the telco’s EPS fell by almost 8% to 19.7 cents in 2016.

3. The dividend policy

StarHub did not include an official dividend policy in its annual report. But, the company’s chief financial officer, Dennis Sim, did have this to say about StarHub’s dividends in the report:

“The Board takes a forward three-year view of our earnings, free cash flow, growth prospects, investment needs and an optimal balance sheet. The appropriate level of dividend payment is determined by the combination of these factors. Their preference is to make sustainable payments.”

4. Historical dividends

Prior to 2017’s first quarter, StarHub had been paying out a quarterly dividend of $0.05 per share since the third quarter of 2009. As such, the company’s annual dividend from 2010 to 2016 was kept constant at $0.20 per share.

But in the first quarter of 2017, StarHub declared a quarterly dividend of $0.04 per share. During the telco’s 2016 fourth quarter earnings, it had guided towards a quarterly dividend of $0.04 per share for 2017.

The four pieces of information above serve as useful starting points for studying StarHub’s dividend. Other areas worth looking into include StarHub’s balance sheet, the amount of free cash flow the company generates, its growth prospects, and more.

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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.