Exploring the Sustainability and Growth of Dividends
HKT Trust and HKT Ltd (HKTTY) recently announced a dividend of $0.57 per share, payable on 2024-07-05, with the ex-dividend date set for 2024-06-04. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into HKT Trust and HKT Ltd's dividend performance and assess its sustainability.
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HKT Trust and HKT Ltd is a triple-play telecommunications provider that operates through three segments: telecommunications services, mobile, and other businesses. Telecommunication services are the larger business segment and generate revenue by providing technology and telecommunications and related services including enterprise solutions, total home solutions, healthtech services, and media entertainment. The Mobile segment represents mobile telecommunications businesses in Hong Kong, and the other segment comprises other new businesses such as The Club's loyalty platform and HKT Financial Services, and corporate support functions. The company's key revenue is generated from Hong Kong.
HKT Trust and HKT Ltd's Dividend Analysis
A Glimpse at HKT Trust and HKT Ltd's Dividend History
HKT Trust and HKT Ltd has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a bi-annually basis. HKT Trust and HKT Ltd has increased its dividend each year since 2014. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 10 years.
HKT Trust and HKT Ltd's Dividend Analysis
Breaking Down HKT Trust and HKT Ltd's Dividend Yield and Growth
As of today, HKT Trust and HKT Ltd currently has a 12-month trailing dividend yield of 8.20% and a 12-month forward dividend yield of 8.36%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, HKT Trust and HKT Ltd's annual dividend growth rate was 2.20%. Extended to a five-year horizon, this rate increased to 2.50% per year. And over the past decade, HKT Trust and HKT Ltd's annual dividends per share growth rate stands at 6.30%.
Based on HKT Trust and HKT Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of HKT Trust and HKT Ltd stock as of today is approximately 9.28%.
HKT Trust and HKT Ltd's Dividend Analysis
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, HKT Trust and HKT Ltd's dividend payout ratio is 1.14, which may suggest that the company's dividend may not be sustainable.
HKT Trust and HKT Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks HKT Trust and HKT Ltd's profitability 6 out of 10 as of 2023-12-31, suggesting fair profitability. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. HKT Trust and HKT Ltd's growth rank of 6 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and HKT Trust and HKT Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. HKT Trust and HKT Ltd's revenue has increased by approximately 2.00% per year on average, a rate that underperforms approximately 62.47% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, HKT Trust and HKT Ltd's earnings increased by approximately -0.30% per year on average, a rate that underperforms approximately 65.77% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of -0.50%, which underperforms approximately 69.9% of global competitors.
Concluding Thoughts on Dividend Sustainability and Growth
While HKT Trust and HKT Ltd has demonstrated a commendable track record of dividend growth, the sustainability of future dividends is contingent upon improving profitability and growth metrics. Investors should closely monitor these aspects alongside the company's payout ratio to make informed decisions. For those seeking high-dividend yield opportunities, GuruFocus Premium users can utilize the High Dividend Yield Screener to discover similar investment opportunities.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.