Singtel's Shareholders to Enjoy Bigger Dividend in 2024

Singapore Telecommunications (SGX:Z74), or Singtel, has announced that its shareholders will receive a bigger dividend than last year. The company's total dividend for the financial year ending 31 March 2024 is projected to be 15.0 SGD per share, up from 14.9 SGD in the previous year. This increase reflects Singtel's strong financial performance and commitment to returning value to shareholders.

The dividend increase comes after a period of relatively stable dividends, with the total payout fluctuating between 12.25 and 17.5 SGD from 2019 to 2023. Historically, Singtel's dividends have been consistent, with an average total payout of 15.7 SGD over the past decade. In comparison, the industry average for telecommunication services companies is around 12.5 SGD. Singtel's dividend increase, therefore, not only exceeds last year's payout but also surpasses the industry average, indicating a strong commitment to shareholder returns.



The dividend increase is driven by a higher final core dividend of 6.0 SGD compared to 5.3 SGD in 2023. This reflects Singtel's improved financial performance and confidence in its future prospects. The company's annual dividend yield of 5.31% (as of Nov 2024) is already relatively high compared to other telecommunication services stocks, suggesting that the company may be prioritizing shareholder payouts over reinvestment.

However, the dividend increase may impact Singtel's ability to reinvest in its business and drive future growth. While the higher dividend provides shareholders with a more attractive yield, it also reduces the company's cash available for reinvestment in expansion, innovation, and other growth initiatives. To maintain a balanced approach, Singtel could consider adjusting its dividend payout ratio, which currently stands at around 75%. By reducing the payout ratio, Singtel can allocate more funds towards reinvestment, driving future growth and ensuring the company's long-term competitiveness.

In conclusion, Singtel's dividend increase is a positive development for shareholders, reflecting the company's strong financial performance and commitment to returning value. However, investors should also consider the potential impact on the company's ability to reinvest in its business and drive future growth. By striking a balance between shareholder payouts and reinvestment, Singtel can create value for all stakeholders in the long run.