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Nine Notable Blue Chip Dividend Stocks

CoinsDividends are the lifeblood of the income investor. And thankfully for yield-hungry investors there are plenty of income shares in the Singapore market to choose from.

For instance, over the last ten years, nine Straits Times Index (SGX: ^STI) companies have not only dished out regular dividends but these companies have either raised or, at worst, held their payout. The notable nine include Singapore Technologies (SGX: S63), Sembcorp Marine (SGX: S51), SingTel and Hongkong Land.

Another three that have consistently rewarded investors include Keppel Corporation, Jardine Strategic Holdings and City Developments.

Of the nine, two companies have increased their pay-outs continuously over the last decade. The two standouts are Jardine Matheson (SGX: J36) and Jardine Cycle & Carriage (SGX: C07). Jardine Matheson has hiked it payout from S$0.56 per share to S$1.65, which is an increase of 11% a year over a decade. Meanwhile, Jardine C&C has increased its distribution to shareholders from S$0.15 to S$1.50 – a rise of 25% compounded over a decade.

The ability to lift pay-outs steadily should not be underestimated. Firstly, it can be a sign of a healthy business. After all, a company can only pay dividends from profits. Secondly, it shows that the company is making shareholder reward a high priority.

A rising dividend might also be of interest to investors whose aim is to buy a share and live off the dividends for the long haul.

For instance, the average share price of Jardine Cycle & Carriage in 2003 was around $4.60. Therefore, the dividend yield at the time was around 3.3%. However, after a decade of continuous dividend hikes, its latest payout of $1.50 would represent a yield on the original cost of the shares of nearly 32%.

From an income investor’s perspective, it is vital that pay-outs are regular, consistent and dependable. There is nothing worse than buying a share for its seemingly attractive yield only to find that the payout will be reduced or axed. Consequently, if you plan to live off dividends “forever”, it is crucial to choose your income shares with care.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.