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.
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.