Part 2 of the write up on dividend trend. This time round on growth counters. You can read Part 1 which is on income counters on this post.

As I started to write this post, a though dawn on me that for this group of companies, I should be looking at the revenue, earning, and cash flow trend instead! What am I thinking?

Oh well, since I have already compiled the data, let me share on the dividend trend in this post. I will work on their growth trend in the coming week.

Again, two numbers stand out. The first is the payout ratio by iFAST. It has been a torrid year for them as the earning plummeted due to one-time impairment, start up cost for bank segment and tough macro conditions. With a strong balance sheet, they have maintained the dividend. Last year’s payout ratio was at 43%, which is much more sustainable. Unsure if they can still maintain the dividend this year but with the sizeable contribution from Hong Kong eMPF project, dividend should continue to increase from FY2024 and beyond.

The second figure is the growth rate of Tractor Supply. There was a huge jump in their quarterly dividend in FY2022 from $0.52 to $0.92, a whopping 76% increase! In the latest quarter, dividend is increased at a more moderate pace of 12% to $1.03. Based on past trend, it is likely that the dividend for the next two quarters will stay at $1.03 and I am hopeful that the dividend for Q4 will be up by another 10% if they can maintain their growth rate.

With the exception of AEM, my cost yield is also higher than the current yield for all the counters. While the main reason for investing in this group of companies is for growth, some of them can become a dividend machine in the future. Their growth will bring about an increase in dividend and I would not be surprise that a few of these counters would provide me with more dividend than some of my income counters in 5 to 10 years time.

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