Baker Technology Limited (SGX:BTP) has announced an increase in its dividend payment, set to take place on the 21st of May. The dividend will be raised to SGD0.015, bringing the dividend yield to 2.7%, which is in line with the industry average.
Prior to this announcement, Baker Technology’s dividend was well covered by both cash flow and earnings, indicating that the payment is sustainable. With most of its earnings being retained to grow the business, the company’s dividend payout ratio is estimated to be 33%, leaving room for future growth.
However, despite the solid dividend yield, Baker Technology has experienced a decline in its earnings per share, with a 14% decrease expected over the next 12 months. The company’s dividend track record also shows a downward trend, with a 94% decrease in the annual payment over the last 10 years.
While the dividend increase is a positive sign, the company’s declining earnings per share and inconsistent dividend payments raise concerns about its long-term sustainability. Investors may want to exercise caution when relying on Baker Technology primarily for dividend income.
For more insights and analysis on Baker Technology’s dividend and financial performance, investors can check out the latest analysis on the company.