A Information to SIA Shares and Dividends, Cash Information

Singapore Airlines (SIA) is not only our national airline, but also Singapore’s pride and joy. An icon that holds up our flag (literally) and proves to the world that even a tiny country like ours can lead the world.

But unfortunately, Covid-19 has pushed our beloved national airline into the background.

In its heyday, Singapore Airlines not only served dignitaries, celebrities, royalty and the people, but was also seen as a reliable investment capable of generating sustainable growth.

Given the severe blow to the aviation industry, how does SIA measure up as an investment today?

Here’s what we’re going to discuss in this post.

SIA share prices over the past five years

As expected, the harmful pandemic was not good for our national airline. In a five-year period from January 2017, share prices fell 49 percent.

There is reason to be optimistic, however. Following the announcement of the full-year 2020 results, the market saw a pickup in trading volume and share prices have been trending higher since May 2020.

How much dividend will i receive?

Unfortunately, SIA does not currently pay dividends.

In early 2020, the airline launched a rights issue to secure more cash flow. The exercise spent over $ 5.3 billion in new equity with the aim of raising $ 9.7 billion through mandatory convertible bonds. SIA stated that the new funds would be used to meet capital and operating expense requirements.

However, if we look at our national airline’s past performance in terms of dividend yields, we see that from 2015 to 2019, shareholders posted returns between 4.3 and 9.04 percent, a five-year average of 6.56 percent.

Keep in mind that this was long before Covid-19 was a threat and the recreational travel sector was as healthy as possible.

SIA dividend distribution plan

No payouts are currently announced. However, the following information may be helpful once SIA resumes paying dividends.

The airline pays dividends twice a year, usually in August and December.

As measured by historical trends, these payouts typically occur after the business update in the first quarter and the business update in the third quarter.

What risks am I exposed to?

Given the encouraging signs of a rebound in both volume and price, you may wonder if this is the right time for you to buy SIA stock.

Note that the increase in activity is mainly due to the rights issue launched on June 5, 2020. This means that increased trading interest could be a natural reaction to investors battling for their preferred positions.

It’s just too early to be sure if a recovery is planned and, if so, how steep or shallow it will be.

As a result, one of the biggest risks investors currently face is uncertainty about the future of air travel. This is compounded by further uncertainties about border restrictions amid the uneven vaccine rollout and the worrying increase in Covid-19 variant strains.

What does the future hold for SIA?

While there is optimism that air travel will recover (the air transport sector is just too important to our modern era of global interconnectivity), SIA (like all airlines) may face a changing business environment that may have significant stumbling blocks Path creates a complete recovery.

The main problem is that business travel, not leisure, makes up the bulk of airline revenue – 75 percent on some flights. On average, a business class ticket is twice as lucrative as a ticket sold on a bus.

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Given that the pandemic has definitely proven that people can telework just as effectively, companies are less likely to send their executives overseas and reserve trips only for long-haul destinations or the most important purposes. This downward pressure on revenue is likely to delay the recovery.

There are also likely to be permanent changes in vacation travel.

The risk of disruptions and sudden changes in itineraries could persist, leading travelers to continue to seek guarantees in the form of refunds and booking flexibility.

This, in turn, could weigh on SIA with some level of uncertainty that could be reflected in stock performance.