Year End Special Offer! Christmas comes early for Singtel share price (SGX: Z74)! The counter is in buoyant form following the release of a set of stellar first half financial result that saw net profit more than doubled to $954 million. In my last article, I had suggested that winter may be over for Singtel share price (SGX: Z74). On the basis of the latest financial result, it seems that the telco has managed to turnaround.
Singtel share price (SGX: Z74) was also given a boost as the management made a couple of shares buybacks in the past few days. 620,989 shares were bought back on 12 November while 620,500 shares were bought back on 15 November. It is unknown if the shares repurchase will continue in the coming days. Year-to-date, Singtel share price (SGX: Z74) has climbed about 10%.
Looking at the results, there are several factors that led to the revival of Singtel’s businesses, namely the resumption in regional economic activities and Airtel’s turnaround. If the telco continues to perform like this for the next two quarters, Singtel share price (SGX: Z74) should be able to breakthrough $3.00 – the level at which Singtel share price (SGX: Z74) used to be traded during pre-pandemic period.
Despite the good showing, the Group announced interim dividend of merely 4.5 cents per share. This is even lower than the interim dividend of 5.1 cents per share given out in last year. Assuming the final dividend pay-out is also 4.5 cents per share and based on current Singtel share price (SGX: Z74) of $2.58, the annualized yield is just 3.5%. Given the volatility of Singtel share price (SGX: Z74), the dividends are not exactly appealing to investors.
The lower dividend pay outs will weigh on Singtel share price (SGX: Z74) and this trend is expected to last for the foreseeable future as Singtel embarks on digital bank and 5G journeys. These endeavours require massive capital expenditure. Nonetheless, the alternative approach to make money out of this counter is to bank on the appreciation of Singtel share price (SGX: Z74). Hence, the current Singtel share price (SGX: Z74) represents a good opportunity to accumulate. This is especially for those who entered Singtel share price (SGX: Z74) at above $3.00 during pre-pandemic times.
Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in Singtel before. Whether Singtel share price (SGX: Z74) will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.
Singtel share price (SGX: Z74) bottomed out
Despite the encouraging 1H financial result, it is going to be a long road ahead for the telco. My view is that it will be an “U-shape” recovery for Singtel share price (SGX: Z74) and that recovery should take place in 2nd half of 2022. Barring unforeseen circumstances (e.g. another ambush from Airtel), the operating environment should improve as regional countries’ economies should be on the full-swing recovery mode.
Data from the latest result revealed a massive [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]Year End Special Offer!
Congratulations on your first step to becoming part of SG Wealth Builder community! For a one-off payment of $100, you can get full access to all the articles and enjoy the benefits of SG Wealth Builder Membership.
The full benefits and privileges of SG Wealth Builder Membership:
- Access to the latest premium articles of SG Wealth Builder
- Email notifications of latest blog articles
- Request for coverage on stocks, insurance and other personal financial topics
- Comment in articles
Note: After payment is made, you will be prompted with registration form to create your user-id and personal password.