Dividends are not just a great way to boost your active income but can seep into your passive funds as well.
In other words, dividends help double the cash flowing in your retirement fund and we all know just how important retirement planning is!
Dividend stocks are a hit among Singaporeans, and for a reason.
Currently, Singapore poses no taxes on most of the dividend income. So whatever the profit is, you can enjoy the whole amount!
Because of this, it comes as no surprise that investors love when they see a company that gives out this type of payment. But, naturally, not all companies are worthy of investments.
If you’re looking to invest, I highly advise you to first read this post on dividend investing in Singapore.
Now, after long hours of research, I finally managed to complete this simple guide to the best dividend stocks in Singapore!
Without further ado, here is everything you need to know about getting some Singapore dividend stocks!
11 Best Dividend Stocks in Singapore
- Hotel Properties Limited
- DBS Group
- Netlink NBN Trust
- Great Eastern
- UOB Limited
- Boustead Singapore Limited
- Haw Par
- Dairy Farm International Holdings
- Singapore Technologies Engineering Ltd
- Micro-Mechanics (Holdings) Ltd
Taking into consideration everything that was mentioned (skip to the end to read what to look out for!), the market offers many companies with good dividend investment offers. Nonetheless, to make it simpler here is my ultimate list of the best dividend stocks in Singapore:
1. Hotel Properties Limited (SGX: H15)
- Company Portfolio: Hotel management
- Share Price: S$3.34
- Current Dividend Yield: 1.20%
In 1980, Hotel Properties Limited Ltd started as a private company. Later, in 1982 it turned into a public firm, gaining access to the Stock Exchange of Singapore.
This company takes part in more than 35 other esteemed hotels and has resorts in around 15 countries. Its long awards portfolio speaks wonders!
Moreover, Hotel Properties Limited is known for building residential properties not only in Singapore. This includes the Met condominium in Bangkok and Holland Park Villa in London.
2. DBS Group (SGX: D05)
- Company Portfolio: Financial services
- Share Price: S$35.55
- Current Dividend Yield: 2.8%
Investors are familiar with DBS Group considering it is one of the 3 largest banks in Singapore. Interestingly enough, this bank gives out dividends that are highly satisfactory, despite its history.
Namely, even in the financial crisis, this company continued giving out payments to its shareholders. This led to it building up a profit of around S$2 billion in 2021.
However, the same year, the Monetary Authority of Singapore demanded that banks put restrictions and lower their dividends. It naturally led to a drop in the payment of around S$0.13. But, investors shouldn’t lose hope!
DBS Group proved why they’re called one of the top three! In a short period, they managed to reclaim the dividend amount of a few years back and reach the current yield of 2.8%.
3. Netlink NBN Trust (SGX: CJLU)
- Company Portfolio: Broadband network; building and designing fiber network infrastructure
- Share Price: S$0.98
- Current Dividend Yield: 5.21%
Thanks to the initiative of the Singaporean Government, people in Singapore entered an oligopoly when it comes to ultra-high broadband networks! Coming into the public market in 2017, Netlink has since been building and designing the fiber network infrastructure of the Next Generation Nationwide Broadband Network in Singapore.
Simply put, this company has been providing houses and companies with Internet coverage. Moreover, telecommunication companies also get access to this fiber network.
Considering what the future holds – with 5G, IoT, and many more innovations waiting to happen – Netlink has solidified its presence! As they put it themselves, “The future of fiber is unlimited!”
4. Great Eastern (SGX: G07)
- Company Portfolio: Insurance services
- Share Price: S$20.96
- Current Dividend Yield: 2.86%
Life insurance in Singapore is vastly desired. Great Eastern has been on the market for over a century, making sure that people live their lives to the fullest. This company provides life insurance, non-life insurance services like short contracts, and has a separate shareholders segment.
The demand for life insurance grows and investors would be happy to know that Great Eastern’s dividend yield has been steady for the past 3 years! This would also imply that dividend investments in this field are a safe play.
5. United Overseas Bank Limited (UOB) (SGX: U11)
- Company Portfolio: Financial services
- Share Price: S$30.37
- Current Dividend Yield: 3.26%
The story of this bank is similar to the one I mentioned about DBS. UOB has been supplying banking services to people all over Asia for over 80 years. It has a strong hold in Singapore, Malaysia, Indonesia, Thailand, and China.
This company doesn’t just give financial solutions but provides personalised financial services, and non-banking activities. Plus, it has a separate segment that takes care of the bank’s own financial investments, as well as its funds.
6. Boustead Singapore Limited (SGX: F9D)
- Company Portfolio: Energy-related engineering; Healthcare; Real estate solutions; Geospatial Technology
- Share Price: S$0.98
- Current Dividend Yield: 8.67%
Boustead Singapore Limited has 4 fields of work: energy-related engineering, real estate solutions, geospatial technology, and healthcare. At the end of 2021, Boustead announced that they’d only pay a S$0.015 dividend per share.
A year prior, this amount was S$0.04. Yet, there is a secure cash flow and we can see that the same year, it paid 68% of the dividends from its free cash flow.
What’s more, in the last few years, Boustead Singapore Limited has grown its earnings. So, all of this leads to no surprise that their current yield is 8.67% – a higher jump than that of last year’s!
7. Haw Par (SGX: H02)
- Company Portfolio: Healthcare; Leisure products; Property and Investment
- Share Price: S$12.07
- Current Dividend Yield: 2.49%
In 2019, this company celebrated 50 years since it had entered the Stock Exchange market of Singapore. Haw Par is the company behind Tiger Balm and Kwan Loong – renowned topical analgesics. Moreover, this company also dives into the leisure sector through its tourist attractions – oceanariums.
Haw Par owns and invests in properties all over Asia. An interesting fact is that this firm kept the same dividend yield as last year – 2.49%.
8. Straco (SGX: S85)
- Company Portfolio: Tourism-related services
- Share Price: S$0.42
- Current Dividend Yield: 2.41%
Straco is a company that should definitely make your dividend investment list. In 2004,
it joined the Mainboard of the Singapore Exchange. The captivating thing about this brand is its many investments and projects to date.
Straco holds Singapore Flyer, Shanghai Ocean Aquarium, Underwater World Xiamen, and the Lixing cable-car service in Mount Lishan Xi’an. Putting this into cash, just from the Shanghai Ocean Aquarium, Straco makes around S$73 million per year!
Even more, it owns the development rights to Chao Yuan Ge who plays an important part in the restoration of “Hua Qing Palace”!
9. Dairy Farm International Holdings Ltd (SGX: D01)
- Company Portfolio: Retail services
- Share Price: S$3.87
- Current Dividend Yield: 5.03%
DFI is the largest Asian retailer of different dishes, beauty products, furniture, and other retailing. Some famous brands like Giant, Guardian, and 7-Eleven belong to this company. Because of the pandemic in 2020, DFI’s stocks lowered.
However, the dip wasn’t so drastic and the company managed to work its way back to the top. Interestingly enough, this comes as no surprise considering that DFI is primarily listed on the London Stock Exchange and has a secondary listing in Bermuda and Singapore.
10. Singapore Technologies Engineering Ltd (SGX: S63)
- Company Portfolio: Aerospace; Urban solutions; Public security
- Share Price: S$3.74
- Current Dividend Yield: 4.01%
The good thing about this company is the vast field it’s spread across. This is the sole reason why it managed to continue business even after the Covid pandemic hit the aerospace business in general.
ST Engineering is also the company behind SAR-21 – the assault rifle. Plus, it has subsidiaries all over the world – the US, Asia, the Middle East, and Europe.
Many investors consider this company risky because of its high payout ratio – around 90%. However, considering the sectors it’s involved in and the steady dividend yield for the last 6 years, I believe that ST Engineering is not as vulnerable as you might think.
11. Micro-Mechanics (Holdings) Ltd (SGX: 5DD)
- Company Portfolio: Semiconductor industry
- Share Price: S$3.31
- Current Dividend Yield: 4.23%
Micro-Mechanics designs and creates parts that are used in the semiconductor industry. From its latest financial results, we can note that this company is set on continuing its outstanding performance by promising to increase the dividend payout.
In 2021 (FY2021) alone, its revenue grew to S$73.7 million thanks to the demand in the semiconductor industry. This brought a rise in the dividend to 14 cents per share. Consequently, the dividend yield increased by 0.6% – bringing it to the present 4.23%.
And that’s all of them – the best dividend stocks in Singapore!
Shares and dividends can really strengthen your portfolio, not to mention you’ll have a stronger safety net when you retire.
Investing in shares provides an abundance of options that fit anyone’s needs.
If you want to take the safe road, a financial advisor can always help you to invest.
Otherwise, I hope that each of the companies I’ve listed will make for a great way to get the dividend income you’re looking for.
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How to Choose the Right Singapore Dividend Stocks
When investing, you surely don’t want to give your money somewhere where it won’t be safe i.e. where you won’t earn any profit. But, before you go dividend investing, you need to understand that as great as dividends are, they are not bulletproof.
Depending on the company, dividends can fluctuate and change in the future.
The underdog can become the star and vice versa!
There are a few things that you should be careful of while on your search for the best dividend stocks in Singapore. Here are my top tips!
Continuous Dividend Payment
First off, look for a company that has a track record of paying dividends. Every company that has proven to give dividends over a longer period of time, is sure to be able to sustain them even in the future.
My best tip would be to look for companies that have more than 5 years behind them in giving out dividends. Moreover, remember to always check what their earning and growth stocks expectations are.
If a company lists that they have more than a 15% expectation rate, then they’re highly just trying to pull money out of your pocket. You might see it happen, but the risk is not worth it.
Look for Big Cap Stock
Simply put, look for mature companies. Ripe enterprises have already reached their growth and leave room for a more clear profit. When a company is set for expansion, most of its means go into growing. And this naturally leaves the dividend program high and dry.
On the contrary, if a company is at its peak - or anywhere near it - then they have a more stable and secure profit. This would result in being able to pay out their shareholders’ dividends.
Check the Company’s CapEx
Capital Expenditures (CapEx) are another important part you need to be wary of. This is tied to the growth of the company yet again.
If you’re planning on investing in Singapore dividend stocks, ensure that the company you choose has a lower CapEx. A lower CapEx means that the company separates more of its funds for the shareholders, meaning, you will get higher dividends.
Companies that pay more attention to CapEx are more likely to reinvest a bigger sum of their money into themselves.
For example, the energy industry is where the highest CapEx currently is. Firms that deal with this business have to continuously invest in their infrastructure. And this only results in lower dividends.
Is the Dividend Payout Rate More Than 50%?
The dividend payout rate is the percent you get from the company’s profit paid out in dividends. Generally speaking, there is no set rate. But, of course, it is better if a company’s dividends are at a higher rate.
Why? Because, it means that the company is more stable, so, your earnings from that dividend will be safe in the future as well. If a company has lower dividend rates, then you have to wonder - where does the money go?
Nonetheless, an excessively high ratio is also not suitable because it puts the company at risk. If it pays, let’s say 85% to dividend ratio, then it’s more prone to an earnings plummet in the future. From here on, the dividend ratio is certainly going to drop, too.
The Company’s Basics
Companies that have solidified their presence on the market are the first ones you should have your eye on. These have been present for years, meaning, they usually tend to give out dividends on a continuous basis.
A company that has a flunky foundation like low profits, low cash flows, or is overall falling on the stock exchange market, gives a clear picture of its future. Low profit equals fewer dividends.
The result would be investors pulling out and thus a gradual decrease in your dividends. In a short amount of time, you will find yourself with less profit than you initially invested.
It goes without saying that companies with a high debt rate are more likely to cut off dividends.
Take in mind that the payment for your dividend comes from the profit the company makes. This means that the more profit it makes, the more “free money” there is to go to distributing dividends.
So, if a big chunk of that goes to cover the company’s debts, the dividend program is sure to be removed.
Watch the Dividend Yield
(highest yielding blue-chip dividends in Singapore over a 12-month yield)
A dividend yield is a percentage that shows how much the company pays out in dividends to its shareholders in one year, compared to its stock price. If this percentage is better than the risk-free rate of return of the country, then you’ve found one of the best dividend stocks in Singapore.