SGX-listed Singapore Telecommunications or Singtel (SG:Z74) is an attractive dividend stock that offers a yield of 5.25%. Moreover, analysts are bullish on the stock and see a solid upside potential over the next 12 months, which could further enhance investors’ total returns.
Singtel is one of the major network operators in Singapore, offering an extensive range of services, including fixed-line, mobile, and internet.
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Revised Dividend Policy
Singtel recently revised its dividend policy and increased the payout range to between 70% and 90% of the underlying net profit from the prior range of 60% to 80%.
For the fiscal half year ended September 30, 2023, the company paid an interim dividend of S$0.052 on December 8. This interim dividend payment marked a 13% year-over-year increase. The aggregate interim dividend amount of S$859 million represented 77% of the company’s underlying net profit for the first half of Fiscal 2024.
Excluding the impact of currency fluctuations, Singtel’s revenue grew 1.5% in the first half of Fiscal 2024. Further, underlying net profit increased nearly 16% to S$1.12 billion.
While management cautioned investors about a challenging macro environment and currency headwinds, they assured that the company is well-positioned to navigate the ongoing headwinds, given its strong balance sheet. The company is focused on improving the margins of the core business and expanding growth engines like NCS (a subsidiary of Singtel that provides technology services) and Digital InfraCo.
Is SGX Stock a Good Buy?
Last month, analysts at Goldman Sachs, UOB Kay Hian, Phillip Securities, and DBS reiterated a Buy rating on SGX stock.
Overall, Singtel earns a Strong Buy consensus rating based on five unanimous Buys. The average price target of S$3.08 implies 25.4% upside potential.
