Keppel to stick with high dividend to make up for share price crash

Its unit price has plunged by 28% since early 2014.

Keppel Corp is expected to stick with its 50-60% dividend payout in an attempt to make up for the crash in its share price, which has slipped by 28% since early 2014.

According to CIMB, Keppel has a history of sticking to its high payout even through the toughest times. In particular, Keppel did not cut its ordinary dividend even during the GFC.

“In spite of weak offshore and marine (O&M) sentiment, we believe the group is likely to keep to its 50-60% payout history. It paid 50% of its reported EPS for FY08 (final dividend declared in early CY09, amidst the GFC). In our model, we have conservatively assumed a total DPS of S$0.39 for FY14 (45% payout). However, using 50-60% as a gauge, Keppel could dish out S$0.31-0.40 of final DPS in its 4Q14 earnings release (expected on 22 Jan), translating to a final DPS yield of 3.8-4.9%,” stated CIMB.