Understanding SATS: Business Model and Why Dividend Policy Matters
First, let’s take a look at how SATS makes money: the company operates in the air travel and tourism industry, providing ground-handling services for airports, in-flight and on-ground food solutions, as well as handling cargo. Needless to say, the company’s turnover and earnings are influenced by travel (which influences the amount of air cargo handled), airport activity and the cost of food. For a cyclical business, the consistency of its dividend payments, rather than large hikes that capture the headlines, matters more for SATS.The Payout Upgrade: What Changed and What It Signals
As mentioned earlier, the interim dividend of S$0.02 per share represents a 33%...
