Companies which increase their dividends signal to the market that they have good prospects. On that note, let’s look at three companies that have raised their dividends in 2018.
The first company on my list is ISEC Healthcare Ltd (SGX: 40T). ISEC is a provider of medical eye care services with ambulatory surgical centres.
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For its 2018 financial year, the company increased its total dividend to 1.56 Singapore cents per share (excluding a special dividend of 0.98 cents) from 1.2 cents a year back. The 2018 ordinary dividend represents a dividend payout ratio of 0.96.
The higher dividend is in line with the company’s strong performance in 2018. For the year, ISEC’s revenue grew 9% to S$40.4 million while net profit attributable to shareholders improved by 6% to S$8.4 million. The company said that the improvement in revenue was due to higher patient visits at its specialised eye-care centres in Malaysia and Singapore.
As for the company’s outlook, Dr Wong Jun Shyan, ISEC’s executive director and chief executive, said:
“Looking ahead to the next 12 months, we believe the region’s ageing population as well as increasing awareness about the benefits of seeking early treatment for ophthalmology issues will continue to drive demand for the specialised services that we provide. We will continue to search for investment opportunities to strengthen our presence in our existing markets and to explore new markets such as China, Indonesia, Myanmar and Vietnam.”
At ISEC’s current share price of S$0.285, it has a trailing price-to-earnings (PE) ratio of around 18 and a trailing dividend yield of 5.5% (excluding the 2018 special dividend).
SBS Transit Ltd (SGX: S61) is the next company to be featured. SBS Transit is a provider of bus and rail services in Singapore. Under the rail services business, the company operates the North East Line (NEL), the Downtown Line (DTL), and the Sengkang and Punggol Light Rapid Transit (SPLRT). As of 5 March 2018, ComfortDelGro Corporation Limited (SGX: C52), one of the largest land transport companies in the world, had a 74.6% stake in SBS Transit.
SBS Transit increased its 2018 total dividend by around 70% to 12.90 Singapore cents per share, translating to a payout ratio of 0.50. In 2017, it dished out just 7.60 cents. To know more about SBS Transit’s dividend history, you can head here.
Revenue for SBS Transit’s 2018 financial year increased by 16.1% year-on-year to S$1.38 billion while its net profit ballooned 70% to S$80.1 million. The higher revenue was on the back of better performance in both its Public Transport Services and Other Commercial Services business segments.
SBS Transit’s current share price is at S$3.43. At that price, it has a trailing PE ratio of 13 and a trailing dividend yield of 3.8%.
The third company on the list is VICOM Limited (SGX: V01). VICOM provides technical testing and inspection services mainly in Singapore and is mostly owned by ComfortDelGro as well. As of 5 March 2018, the land transport giant had a 67.1% stake in VICOM.
In 2018, VICOM declared a total dividend of 36.63 Singapore cents per share (excluding a special dividend of 8.62 Singapore cents), up around 2% from 2017’s total dividend of 36 Singapore cents per share. The 2018 ordinary dividend represents a dividend payout ratio of 0.94.
The increase in dividend comes on the back of higher revenue and net profit for VICOM during the financial year. To know more about VICOM’s latest earnings, you can check out the coverage here.
At VICOM’s current share price of S$6.29, it has a trailing PE ratio of about 16 and a trailing dividend yield of 5.8% (excluding the special dividend in 2018).
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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 SBS Transit Ltd and VICOM Limited. Motley Fool Singapore contributor Sudhan P owns shares in SBS Transit Ltd and VICOM Limited.