Free Cash Flow drops y-o-y
For more info on SATS, check out their Investor Relations Page here: link.
I added SATS to my stock portfolio on 12th Oct 2017. What I like about SATS: proven track record, local monopoly for inflight food catering and gateway services, growing EPS, DPS over the years and low debt. I believe their is further local growth potential with fourth and fifth airport terminals coming up. Temasek is the major shareholder holding 39.87% of shares.
Assuming a DPU of $0.17, my dividend yield based on purchase price of $4.65 would be 0.17/4.65 x 100 = 3.66%
This yield may not seem high for now but if the EPS can continue to grow, SATS will be able to raise the DPU again in future. This is also a dividend yield that I could accept. They have been growing their DPU in the past. Their payout ratio has been around 70% range for the past few years. I believe they will not have any issue maintaining the DPU unlike some *cough* telco *cough* companies. This is a small purchase for me. If the share price further dips, I will be able to slowly accumulate. With DBS Multiplier and Cash Upfront account, I am basically buying shares commission free. The interest that I earned from this account already more than cover the fees.
This is not a recommendation to buy SATS. The price is currently on a downtrend. Please DYODD before buying or selling any company shares mentioned in my blog posts.