There are 30 component stocks in the Straits Times Index. All the stocks pay dividends at varying amounts. Out of these 30 stocks, 9 stocks have stated specific dividend payout ratio they aim to achieve. I have ran through the annual reports and picked out the dividend policies of these companies. While a dividend policy is not as guaranteed as a bond coupon payment, it at least shows the management’s willingness and confidence in delivering dividend expectations.
1) Ascendas REIT
Even though the requirement for REITs is to distribute at least 90% of its taxable income, Ascendas is willing to go for 100%.
“The Trust’s distribution policy is to distribute 100% of its distributable income to Unitholders, other than gains on the sale of properties that are determined by IRAS to be trading gains and unrealised surplus on revaluation of investment properties and investment properties under development.”
“The Company has a policy on the payment of dividends. Barring unforeseen circumstances, the Company’s policy is to declare a dividend of at least 30% of the annual profit after tax and non-controlling interests excluding unrealised revaluation gains or losses as well as impairment charges or write backs.”
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3) CapitaMall Trust
This is a REIT too and hence, the distribution ratio is regulated rather than self initiated.
“The Trust has a distribution policy to distribute at least 90.0% of its taxable income, other than gains from the sale of real estate properties that are determined by the IRAS to be trading gains”
“[O]ur declared policy of paying at least 50% of our profit as dividend.”
5) Golden Agri-Resources
“The Company currently intends to declare future dividends of up to 30% of its underlying profit, i.e. profit after excluding any adjustments related to International Accounting Standard (IAS) 41: Agriculture and other non-operating items.”
6) Singapore Exchange
“We aim to pay quarterly dividends of 4 cents per share (16 cents per year) or at least 80% of profit, whichever is higher.”
“Since May 2013, SingTel’s dividend policy has been to pay between 60% and 75% of underlying net profit.”
8) Thai Beverage
“Not less than 50% of net profit after deducting all appropriated reserves and investments”
“Historically, the Company has paid out about 20% of the yearly profits as dividends. The Board aims to increase the dividend payout over time when factors are favorable to do so.”
It is also important to note that there are component stocks without a dividend policy and yet their payout ratio can be close to 100%. For example, Starhub, SIA Engineering, ST Engineering, SPH, and HPH have distributed 80% and above of their profits as dividends.
[Photo credit: LendingMemo.com]