Credit Bureau Asia (SGX:TCU) Will Pay A Dividend Of SGD0.02

Credit Bureau Asia Limited's (SGX:TCU) investors are due to receive a payment of SGD0.02 per share on 30th of May. The dividend yield is 3.0% based on this payment, which is a little bit low compared to the other companies in the industry.

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Credit Bureau Asia's Projected Earnings Seem Likely To Cover Future Distributions

Even a low dividend yield can be attractive if it is sustained for years on end. Before this announcement, Credit Bureau Asia was paying out 82% of earnings, but a comparatively small 32% of free cash flows. In general, cash flows are more important than earnings, so we are comfortable that the dividend will be sustainable going forward, especially with so much cash left over for reinvestment.

EPS is set to grow by 7.0% over the next year if recent trends continue. Assuming the dividend continues along recent trends, our estimates say the payout ratio could reach 78%, which is definitely on the higher side, but we wouldn't necessarily say this is unsustainable.

Check out our latest analysis for Credit Bureau Asia

Credit Bureau Asia Doesn't Have A Long Payment History

The dividend hasn't seen any major cuts in the past, but the company has only been paying a dividend for 4 years, which isn't that long in the grand scheme of things. The dividend has gone from an annual total of SGD0.034 in 2021 to the most recent total annual payment of SGD0.04. This means that it has been growing its distributions at 4.1% per annum over that time. Modest dividend growth is good to see, especially with the payments being relatively stable. However, the payment history is relatively short and we wouldn't want to rely on this dividend too much.

We Could See Credit Bureau Asia's Dividend Growing

Investors could be attracted to the stock based on the quality of its payment history. We are encouraged to see that Credit Bureau Asia has grown earnings per share at 7.0% per year over the past five years. Recently, the company has been able to grow earnings at a decent rate, but with the payout ratio on the higher end we don't think the dividend has many prospects for growth.

Our Thoughts On Credit Bureau Asia's Dividend

Overall, we don't think this company makes a great dividend stock, even though the dividend wasn't cut this year. In the past, the payments have been unstable, but over the short term the dividend could be reliable, with the company generating enough cash to cover it. We would probably look elsewhere for an income investment.

Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. Meanwhile, despite the importance of dividend payments, they are not the only factors our readers should know when assessing a company. Now, if you want to look closer, it would be worth checking out our free research on Credit Bureau Asia management tenure, salary, and performance. Is Credit Bureau Asia not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.