LHT Holdings Limited (SGX:BEI) stock is set to trade ex-dividend in 2 days. The ex-dividend date is one day before the record date, which is when shareholders must be on the company’s books to receive a dividend. It’s crucial to know the ex-dividend date because any trades on the stock need to be settled by or before the record date. If you buy LHT Holdings’ shares on or after May 17th, you won’t be eligible to receive the dividend paid on May 30th.
The upcoming dividend payment will be S$0.18 per share, with a total distribution of S$0.05 per share last year. This gives LHT Holdings a trailing yield of 3.7% based on the current share price of S$1.36. When investing for dividends, it’s important to assess if the company’s dividend is reliable and sustainable. Check if LHT Holdings has been able to grow its dividends or if there’s a possibility of a cut.
A company paying out more in dividends than it earns may face sustainability issues. LHT Holdings paid out 61% of its earnings and 63% of its free cash flow last year, which is within a normal range for dividend-paying companies. The dividend being covered by both profit and cash flow suggests sustainability, as long as earnings remain stable.
Earnings growth is a key factor for sustainable dividends. LHT Holdings has shown steady growth, with earnings per share up 4.9% on average over the last five years. The company has also increased its dividend by approximately 9.6% a year on average over the past decade. While there’s room to increase the payout ratio and reinvest in the business, a higher payout ratio may limit future growth prospects.
In conclusion, LHT Holdings has modest earnings per share growth and paid out a bit over half of its earnings and free cash flow last year. While not bearish on the stock, there may be better dividend investments available. It’s important to consider the risks the business faces before making any investment decisions.