Sheng Siong has seen a rise in the dividend yield in 2020. The sudden surge in the stock price contributed to a higher dividend yield than other companies in the Singapore stock market. Having paid out a dividend every year since the initial public offering (IPO), the company’s performance and payout have gradually increased over the years.
This high payout is a very attractive feature for investors who seek high-dividend paying companies. As restrictions change due to the pandemic, Sheng Siong shareholders could significantly benefit from higher dividends in the coming years.
Sheng Siong Profile
Sheng Siong is Singapore based supermarket chain with 63 outlets so far. The company is also expanding into China to open new stores for its clientele. As a supermarket located in the heartlands, the stores are in the neighborhoods, rather than shopping malls.
Sheng Siong’s growth has spiraled since the arrival of the COVID-19 pandemic. For instance, when Singapore announced tightening measures in May 2021, Sheng Siong’s share price jumped 10% within the day.
Q1 2021 Net Profit Growth
The stellar numbers due to the COVID-19 pandemic significantly contributed to the net profit. For Q1 2021, Sheng Siong’s net profit grew by 6.5% to S$30.9 million.
These numbers are considerably higher than Q1 2020. Overall, the FY2020 net profit rose to an all-time high of 83.7% YOY to S$139.1 million. These positive results have also contributed to the gradual uptrend of the stock price.
Because of these results, Sheng Siong’s staff received a 16-month bonus, sparking a string of Sheng Siong memes, which indicated the strong revenue performance of the supermarket chain. In addition, Sheng Siong’s stock price traded at about S$1.6 in May 2021 compared to less than S$1 in 2018. Because of this, many investors have added Sheng Siong to their portfolios for its dividends rather than capital gains.
Sheng Siong Dividend Share – 5 Year Report Card
For the past several years, Sheng Siong continues to offer a steady dividend payout. The data below looks at the dividend share for the past five years.
|Year||Dividend Per Share||Yield (%)|
From this data, you can see the Sheng Siong dividends have been generally on the rise for the past five years. Based on the 2020 performance and the Q1 2021 results, this is a great year for investors because this is the highest dividend per share yet.
Dividend Payout Schedule
Sheng Siong pays out dividends bi-annually. The first part, known as the interim dividend) is paid out in the second quarter, while the final one is received in the fourth quarter.
Based on past years, the dividend payment date is in May and August. For May 2021, Sheng Siong gave out the interim dividend of S$0.03 per share. If you purchase 10,000 Sheng Siong shares, you’ll receive S$300 worth of dividends based on this payout.
The Sheng Siong yield for the past five years has been between 2% and 4%. This percentage is not impressive because Singapore stocks by banks and real estate investment trusts (REITs) offer higher yields. However, this rate is still a good investment because it has little volatility and can help your wealth beat inflation while diversifying your portfolio.
|Year||Interim dividend per share (Singapore cents)||Final dividend per share (Singapore cents)||Total dividend per share (Singapore cents)|
Since its initial public offering (IPO) listing in 2011, Sheng Siong has paid dividends every year. Compared to 2016, the total dividends have increased from 3.75 Singapore cents per share to 6.50 cents in 2020, a significant annual growth.
The increase in business and revenue in 2020 contributed to the bumper dividends. In addition, the net profit improved by about 84% due to increased demand thanks to COVID-19.
Is Sheng Siong Shares Worth Your Investment?
The simple answer is yes; Sheng Siong is an excellent investment choice, especially if you want to add a stock with a steady passive income stream to your portfolio. The supermarket has also consistently paid out dividends each year without fail and has seen a rise during the pandemic.
Sheng Siong’s net profit is increasing because, despite the uncertainty of the COVID-19 pandemic, people still need to go to the supermarket to get household items and purchase groceries.
Sheng Siong stores also offer its customers attractive benefits. Because of its location in the heartlands, the Sheng Siong cashiers have very long queues and provide quality products at an affordable price than other supermarkets.
Frequent Sheng Siong shoppers get into lucky draws with up to 12% cashback for customers using their credit cards. In addition, senior citizens also get a 3% discount every Wednesday for the entire 2021. This is good for the supermarket’s profits.
What are the Risks?
Investing in Sheng Siong shares typically comes with its own risks. The grocery store isn’t the only one in Singapore. There are other different grocery stores and local supermarkets such as Cold Storage, Giant, NTUC, FairPrice, and even HAO Mart, which provide the same services.
In addition, due to the pandemic, there are upcoming online supermarkets like Redmart and Grab Mart, which offer customers doorstep delivery. This could affect Sheng Siong’s growth.
Sheng Siong’s share price in the stock market has been performing very well since the start of COVID-19. However, there’s a risk that this could change, and numbers drop significantly if the foot traffic and purchases at supermarkets reduce as travel and dining out resume.
Sheng Siong shares are a good investment choice. Based on its performance in 2020 and Q1 2021, Sheng Siong shareholders could highly benefit and earn higher dividends in the long run, especially if flexible work arrangements remain the norm in Singapore post-pandemic.
Sheng Siong’s CEO, the supermarket is also expanding into other markets, which is critical to improving profitability and gross margins. As the Sheng Siong stores expand their footprint, the gross margin will increase and boost the dividend payout. If you would like to invest in a long-term passive income, the Sheng Siong share is a perfect alternative.
- Sheng Siong’s stock price and dividend yield significantly improved since the onset of the pandemic because more people visited the supermarket to purchase items, boosting the overall revenue.
- Since the IPO, Sheng Siong typically pays out a dividend to its shareholders every year, making it a good investment if you want to purchase Sheng Siong shares.
- The shareholders could earn more dividends if the shopping habits remain post-pandemic.
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