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Boustead’s 10 Consecutive Years of Dividend

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Not many listed companies in Singapore can claim to have more than 100 years of history. Boustead belongs to this handful group of companies.
Boustead is a progressive global Engineering Services & Geo-Spatial Technology Group offering an extensive range of specialized engineering services and geo-spatial solutions. Its suite of engineering services is geared to fulfil the demands of specialized engineering fields such as energy-related engineering (for oil & gas / petrochemicals and solid waste energy recovery), water & wastewater engineering and industrial real estate solutions.
Under its geo-spatial technology arm, the Group provides consulting services and distribute ESRI geo-spatial technology to major markets across Australia, South East Asia and South Asia.
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Dividend History
Although Boustead has no formal dividend policy, it has a tradition of paying dividends linked to long-term net profit growth.  Boustead has achieved respectable growth in dividends over the past ten years, with a compounded annual growth rate of 21% over that period.

Their history of annual dividend payments includes:
1)Ten consecutive years of dividend payments;
2) Growth in the ordinary dividend to 5 cents per share in FY2012 after maintaining the ordinary dividend at 4 cents per share for four consecutive years; and
3) Paying a total of 33.75 cents in cash dividends over ten consecutive years, equivalent to almost 200% of the purchase price of the Boustead share at 17 cents at the beginning of FY2003.

Financial Strength
As a wealth builder, I like Boustead because it is financially strong with net current assets of $150million and has consistently paid out dividends to shareholders for the last ten years. The business is well diversified to withstand potential economic recession. It is well managed with sound corporate strategies. However, given the current high valuation climax in Singapore market, I would only purchase this stock during market correction.

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Updated: January 15, 2016 — 4:24 pm

1 Comment

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  1. Hi GS

    Comparing to similar mid-cap stocks with similar market capitalisation like Kingsmen, Silverlake, Riverstone, Boustead looks to be the cheapest in valuation at PE of around 8+.

    I’m quite confident that they are going to announce a 7 cents dividends for this FY, given their extremely good results this FY.

    I am vested in this of course and Boustead remains one of my favorite.

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