Asian Pay Television Trust: A Dividend Play in a Challenging Market

Asian Pay Television Trust (SGX:S7OU) has been a mainstay in the pay-TV and broadband industries for over a decade, operating in markets such as Taiwan, Hong Kong, Japan, and Singapore. However, investors who bought into the company five years ago are sitting on a loss of 26%. This article aims to analyze the company's performance, dividend policy, and future prospects to help investors make informed decisions.

Historical Performance and Dividend Yield

Asian Pay Television Trust has maintained a consistent dividend policy over the past five years, with a current yield of 13.29%. The company has paid dividends quarterly, with the exception of 2020 when it paid dividends semi-annually due to the COVID-19 pandemic. The dividend per share has remained relatively stable, with a slight decline in recent years. This consistency in dividend policy has provided investors with a stable income stream, contributing to the total shareholder yield. However, the company's dividend growth rate has been negative (-2.0%), indicating that the dividends have not kept pace with the growth in the company's earnings or cash flows. This may be a concern for investors looking for capital appreciation in addition to income.

Stock Price Performance and Dividend Payout

The company's stock price performance has been negative, with a 5-year change of -52.98%. This suggests that the dividend payout has not been sufficient to attract investors or offset the decline in the stock price. Additionally, the dividend growth rate has been negative at -2.0%, indicating that the dividend payout has not kept pace with the company's earnings growth.

Dividend Yield Comparison

Asian Pay Television Trust (SGX:S7OU) has a current dividend yield of 13.29%, which is significantly higher than the average dividend yield of its peers in the Media industry and the broader market. According to the provided information, the average dividend yield of the Media industry is around 3.5%, while the broader market has an average dividend yield of approximately 4.5%. This indicates that Asian Pay Television Trust offers a more attractive dividend yield compared to its peers and the broader market, making it an appealing option for income-oriented investors.

Acquisitions and Strategic Decisions

Asian Pay Television Trust's acquisitions and strategic decisions have had a significant impact on its financial performance and stock price over the past five years. The company's sole investment, Taiwan Broadband Communications Group (TBC), was acquired in 2013. TBC is a leading cable operator in Taiwan, providing Basic cable TV, Premium digital cable TV, and high-speed fixed-line broadband services. This acquisition gave APTT a strong foothold in the Taiwanese market and access to a large customer base. However, the acquisition also increased APTT's debt levels, which has been a concern for analysts and investors.

APTT has also expanded its operations into Hong Kong, Japan, and Singapore, acquiring or establishing pay-TV and broadband businesses in these regions. These expansions have allowed APTT to diversify its revenue streams and tap into new markets. However, these expansions have also increased the company's operational complexity and capital expenditure requirements, leading to fluctuations in APTT's earnings and cash flows.

Future Prospects and Challenges

Asian Pay Television Trust faces several challenges in the coming years, including the secular decline in basic cable TV revenue and the need to manage content costs. The company has adapted to these challenges by focusing on broadband growth and diversifying its revenue streams. However, the company's dividend growth rate has been negative, and its stock price performance has been poor over the past five years. Investors should carefully consider these factors when evaluating the company's future prospects.

In conclusion, Asian Pay Television Trust (SGX:S7OU) offers a high dividend yield compared to its peers and the broader market, making it an attractive option for income-oriented investors. However, the company's stock price performance has been poor over the past five years, and investors should carefully consider the company's future prospects and challenges before making an investment decision.