Dividend Boost for Sing Investments: A Golden Opportunity or a Risky Gamble?

The market is abuzz with news that Sing Investments & Finance (SGX:S35) has announced a dividend hike to SGD0.065 per share for 2025—a 8.3% increase from last year’s SGD0.06 payout. At first glance, this move might seem like a green light for income investors. But as the saying goes, “don’t let the dividend blind you to the fundamentals.” Let’s dig into the numbers and see whether this is a buy, a hold, or a red flag.

The Dividend Story: Steady Progress or False Comfort?

Sing Investments has been methodically nudging its dividend upward since 2020. From a meager SGD0.036 in 2021 to this year’s SGD0.065, the yield now sits at 5.75%. That’s a solid number, especially compared to the Consumer Finance sector’s paltry 1.4% average. But here’s the catch: this dividend is not backed by free cash flow. The company’s payout ratio of 42% might look safe on paper, but without cash reserves, even a small earnings hiccup could force a payout cut.

The Financial Health Check: Growth or Stagnation?

Looking at earnings, the company’s EPS has been on a rollercoaster. After hitting S$0.24 in 2022—a high not seen since 2008—the metric dropped to S$0.14 in 2023 before inching up to S$0.15 in 2024. The first half of 2024 even saw a slight decline from the previous year. This volatility isn’t just about market conditions; it’s a red flag for consistency.

Meanwhile, the stock is currently trading at a 21% discount to its intrinsic value, according to recent estimates. That could be a buying opportunity—but only if the company can stabilize its earnings and shore up liquidity.

The Risks Lurking Beneath the Surface

Two major risks stand out here. First, Sing Investments has faced repeated delays in financial data reporting—flagged as a “minor risk” in 2024 and 2025. In today’s fast-paced markets, delayed reports can spook investors and trigger sell-offs. Second, the lack of free cash flow means the company might be relying on debt or reserves to fund these dividends. If earnings stumble again, the dividend could be the first thing to go.

The Bottom Line: A Dividend for the Bold, Not the Faint of Heart

Here’s the math: the 5.75% yield is a magnet for income seekers, and the dividend growth trend—albeit slow—is real. But the absence of free cash flow and inconsistent earnings make this a high-risk, high-reward play.

If you’re an aggressive investor willing to bet on a turnaround, this could be a steal at current prices—especially with the stock undervalued by 21%. But if you’re conservative, walk away unless management addresses the cash flow issues and starts delivering consistent EPS growth.

Final Verdict: Buy for income only if you can stomach volatility and delays. Otherwise, this is a “hold” until the company proves it can generate cash—and keep the dividends flowing.

Data as of April 2025. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.