Five Consistent Dividend Growers

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It’s one thing to see dividend checks streaming in regularly; it’s another to see these checks becoming fatter every year.

For some companies, their investors have indeed had such fortune. Since 2008, these five companies have grown their dividends every year, as shown in the table below:

Dividends 2008 2009 2010 2011 2012
Keppel Corporation (SGX: BN4) S$0.318 S$0.346 S$0.382 S$0.430 S$0.450
(SGX: V01)
S$0.093 S$0.118 S$0.161 S$0.176 S$0.182
Frasers Centrepoint Trust**
(SGX: J69U)
S$0.075 S$0.082 S$0.083 S$0.100 S$0.109
Jardine Matheson Holdings
(SGX: J36)
US$0.75 US$0.90 US$1.15 US$1.25 US$1.35
Jardine Strategic Holdings
(SGX: J37)
US$0.19 US$0.20 US$0.21 US$0.225 US$0.24
**For FCT, it’s for the financial year ended Sep 2009 to the FY ended Sep 2013

Source: S&P Capital IQ

Interestingly, these five shares do not exactly have the most exciting dividend yields, save for the retail-mall-focused real estate investment trust FCT, which is yielding 6% based on its declared dividends for its last completed financial year and current share price of S$1.81.

For a comparison, the Straits Times Index (SGX: ^STI) has a dividend yield of around 2.6% at the moment if we use the SPDR Straits Times Index ETF’s (SGX: ES3) data as a close proxy.

The diversified marine, property, and infrastructure business group Keppel Corp has a dividend yield of 4%, while commercial testing and inspection firm Vicom’s not far behind with a  3.7% yield.

The two conglomerates, JMH and JSH, both belong to the Jardine Matheson Group of companies and both actually own huge block of shares in each other. That’s not the only similar things they have going on for them; both shares have yields somewhat lower than the market’s. JMH’s historical dividend yield is at 2.58% while JSH’s yield is a paltry 0.7%.

But here’s an interesting thing, from the start of 2008 till today, the higher yielding shares have had the lowest total return (capital appreciation plus gains from reinvesting dividends). Here’s what I mean:

Higher Yielding Shares Dividend Yield Total Return
FCT 6% 83%
Keppel Corp. 4% 34%
Lower Yielding Shares Dividend Yield Total Return
Vicom 3.7% 262%
JMH 2.58% 119%
JSH 0.7% 120%

Source: S&P Capital IQ

So, it seems that high yields shouldn’t be an investor’s sole concern if the focus is on maximising long-term gains.

Make no mistake though; dividends are very important for investors over the long-run. But instead of just eyeing high yields, considerations such as growth in dividends and in other aspects of a business’s results should come to the fore too.

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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 contributor Chong Ser Jing doesn’t own shares in any companies mentioned.