Raffles Medical Group's Dividend to Increase to SGD0.025, but Yield Remains Modest at 2.5%

Raffles Medical Group's dividend will increase to SGD0.025 on May 23, but the 2.5% yield is modest. The company's future dividend projections appear well-covered by earnings, with a forecasted 36.1% EPS growth over the next year. However, the dividend has been cut in the past, and EPS has been flat over the past five years, which may limit future dividend growth.

Raffles Medical Group Ltd (SGX:BSL) has announced an increase in its dividend, which will rise to SGD0.025 on May 23, 2025. This represents a 2.5% yield, which is modest compared to some other dividend stocks. While the dividend increase is a positive sign, it is important to consider the broader context of the company's financial performance and future prospects.

Looking at the company's earnings per share (EPS) growth projections, analysts forecast a 36.1% increase over the next year. This strong EPS growth suggests that the company's financial health is robust, and it may be able to support future dividend increases. However, it is crucial to note that the company's EPS has been relatively flat over the past five years, which may limit the potential for significant dividend growth in the near future.

Insider transactions also provide some insights into the company's prospects. Over the last year, insiders have been net buyers of Raffles Medical Group shares, with the Executive Chairman & CEO Choon Yong Loo making the largest purchase. This suggests that insiders are confident in the company's future, as they have been buying shares at prices below the current market rate. However, it is essential to remember that insider transactions should not be the sole basis for investment decisions [1].

Despite the positive signals from insider transactions and EPS growth projections, there are some risks to consider. The company has faced dividend cuts in the past, which could indicate that management is cautious about future dividend growth. Additionally, the company's EPS growth has been relatively flat over the past five years, which may limit the potential for significant dividend increases in the near future.

In conclusion, while Raffles Medical Group's dividend increase is a positive sign, it is important to consider the broader context of the company's financial performance and future prospects. The company's strong EPS growth projections suggest that it may be able to support future dividend increases, but the flat EPS growth over the past five years and past dividend cuts indicate that management may be cautious about future dividend growth. As always, investors should conduct their own research and consider their individual financial situation before making any investment decisions.

References:
[1] https://simplywall.st/stocks/sg/healthcare/sgx-bsl/raffles-medical-group-shares/news/this-raffles-medical-group-insider-increased-their-holding-i