MENU

The Straits Times Index’s Steady Dividends

dividends pic

Dividends form an important component of long-term returns for investors. But, the utility of dividends becomes limited if a company has the tendency to reduce or even remove it completely during times of economic distress.

In America, dividend aristocrats – companies that have a history of 25 years or more of consecutive annual dividend increases – such as healthcare and consumer products giant Johnson & Johnson, fizzy drinks juggernaut Coca-Cola, and cigarette maker Altria, have delivered massive returns for shareholders since the late 1960s in large part due to their steady dividend growth.

It’s a little unfortunate to say that I can’t seem to find, among the blue chips here in Singapore that are part of the current incarnation of the Straits Times Index (SGX: ^STI), any companies with a storied history of dividends that befits an ‘aristocrat’.

Nonetheless, there are some of them that have managed to grow their dividends steadily over the past decade through both good times and bad, where even the Great Financial Crisis of 2007-2009 couldn’t put a dent to those dividends.

These companies include the trio of conglomerates Jardine Matheson Holdings (SGX: J36), Jardine Strategic Holdings (SGX: J37), and Jardine Cycle & Carriage (SGX: C07). All three are part of the sprawling Jardine Matheson Group of companies.

Next, we also have Thailand-based beverage and snacks manufacturer Thai Beverage (SGX: Y92), telecommunications outfit Starhub (SGX: CC3), and real estate developer Hongkong Land Holdings (SGX: H78), which is also part of the Jardine Matheson Group.

Dividends for financial year

Jardine Matheson

Jardine Strategic

Jardine C&C

2003

US$ 0.33

US$ 0.145

US$ 0.0872

2004

US$ 0.40

US$ 0.152

US$ 0.10

2005

US$ 0.45

US$ 0.16

US$ 0.18

2006

US$ 0.50

US$ 0.17

US$ 0.20

2007

US$ 0.65

US$ 0.18

US$ 0.43

2008

US$ 0.75

US$ 0.19

US$ 0.50

2009

US$ 0.90

US$ 0.20

US$ 0.58

2010

US$ 1.15

US$ 0.21

US$ 0.98

2011

US$ 1.25

US$ 0.225

US$ 1.23

2012

US$ 1.35

US$ 0.24

US$ 1.23

Source: S&P Capital IQ

Dividends for financial year

Thai Beverage

Starhub

Hongkong Land

2003

US$ 0.06

2004

THB 0.12

US$ 0.07

2005

THB 0.24

S$ 0.09

US$ 0.08

2006

THB 0.22

S$ 0.115

US$ 0.10

2007

THB 0.29

S$ 0.16

US$ 0.13

2008

THB 0.30

S$ 0.18

US$ 0.13

2009

THB 0.33

S$ 0.19

US$ 0.16

2010

THB 0.35

S$ 0.2

US$ 0.16

2011

THB 0.37

S$ 0.2

US$ 0.16

2012

THB 0.42

S$ 0.2

US$ 0.17

Source: S&P Capital IQ

The numbers above might look nice, but why should investors bother with a decade-long history of dividends though? That’s because looking back at past records can help clue us in to potential opportunities or help give us a perspective of what we can reasonably expect in the years ahead.

That said, future dividends are ultimately determined by the strength of a company’s business in the future. So, regardless of how amazing any company’s history has been, it would certainly pay to think hard about what it can do in the years ahead.

Click here now for your FREE subscription to Take Stock Singapore, The Motley Fool’s free investing newsletter. Written by David Kuo, Take Stock Singapore tells you exactly what’s happening in today’s markets, and shows how you can GROW your wealth in the years ahead.  

The Motley Fool’s purpose is to help the world invest, better. Like us on Facebook  to keep up-to-date with our latest news and articles.

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