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This stock has guaranteed 4% dividends for the past three years

Ng Qi Siang
Ng Qi Siang 2/23/2021 02:42 PM GMT+08  • 4 min read
This stock has guaranteed 4% dividends for the past three years
Despite the stock's exposure to aerospace, analysts do not expect significant change in dividend yield until 2022 at least.
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Few stocks can maintain consistent dividend yields as the market dances to the beat of “animal spirits”. Yet since 2018, ST Engineering has delivered a consistent 4% dividend yield and 15 cents distribution per share (DPS), with analysts not expecting this to change any time soon.

Despite its not insignificant exposure to the aerospace sector, RHB analyst Shekhar Jaiswal and CGS-CIMB analyst Lim Siew Khee see ST Engineering delivering its usual 15 cents dividend at least until 2022. Both have reiterated “buy” calls on the counters, with Lim proclaiming the counter “relatively stronger than peers”.

“We remain optimistic on 2021’s earnings recovery – aided by order delivery normalisations across all business segments. A y-o-y higher order backlog, robust balance sheet, and ability to generate positive FCF and sustain dividend payments supports our call on the stock,” says Jaiswal in a Feb 22 broker’s report, citing a target price of $4.25.

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