Great M1 Bear?
M1 has been on huge selling pressure lately due to the anticipation of the 4th telco entering the Singapore market once IDA announces so.
Price has declined from a high of $3.90 to $3.20 (18% drop). At a closing price of $3.20 (trough), this translates to a yummylicious dividend yield of
5.9%.
Is 19 cents per share of dividends sustainable? Let me attempt to analyse below (I may be incorrect).
| (S$m) |
FY2010 |
FY2011 |
FY2012 |
FY2013 |
FY2014 |
| EPS (cents) |
17.5 |
18.1 |
16.1 |
17.4 |
18.8 |
| Growth |
3% |
-11% |
8% |
8% |
| Regular payout/share(cents) |
14 |
14.5 |
12.9 |
13.9 |
18.9 |
| Payout ratio |
80% |
80% |
80% |
80% |
101% |
| Total dividend (include special Dividends) |
17.5 |
14.5 |
14.6 |
21 |
18.9 |
| Payout ratio |
100% |
80% |
90% |
120% |
101% |
M1's dividend policy is to pay out at least 80% of its earnings. We can see this from its regular dividend payout for the past five years......
