MENU

4 Dividend Shares You can Trust

Having a solid history of maintaining or increasing dividends over a decade is no mean feat for a company. In fact, such a trait is rare even for some of Singapore’s largest publicly-listed companies that are found within the Straits Times Index (SGX: ^STI).

At last count, only a handful of the index’s 30 constituents have managed to grow or maintain their dividends in each consecutive year over their last 10 completed-financial years. And, these companies are Jardine Matheson Holdings (SGX: J36), Jardine Strategic Holdings (SGX: J37), and Hongkong Land Holdings (SGX: H78). Interestingly enough, all three companies are linked under the same corporate parent – the sprawling conglomerate, the Jardine Matheson Group.

Dividends

Year

Jardine Matheson Holdings (US$) Jardine Strategic Holdings (US$) Hongkong Land (US$)

2003

0.33 0.145 0.06

2004

0.4 0.152 0.07

2005

0.45 0.16 0.08

2006

0.5 0.17 0.1

2007

0.65 0.18 0.13
2008 0.75 0.19

0.13

2009 0.9 0.2

0.16

2010 1.15 0.21

0.16

2011 1.25 0.225

0.16

2012 1.35 0.24

0.17

2013 1.4 0.255

0.18

Source: S&P Capital IQ

In any case, the rarity of such a trait amongst the large companies makes it even more valuable when it’s found amongst shares with much smaller market capitalisations. With a market value of just S$180 million, Kingsmen Creatives (SGX: 5MZ) is certainly no giant when compared with the trio of Jardine Matheson (US$42.3 billion), Jardine Strategic (US$21.6 billion), and Hongkong Land (US$16.2 billion). Nonetheless, Kingsmen Creatives does have any enviable track record of maintaining or growing its dividends since 2003:

Dividends

Year

Kingsmen Creatives (Singapore cents)

2003

0.46

2004

0.47

2005

0.67

2006

1.33

2007

2.00

2008

3.00

2009

3.50

2010

4.00

2011

4.00

2012

4.00

2013

4.00

Source: S&P Capital IQ

Astute readers might notice that the dividends for the four companies had managed to grow even through the Great Financial Crisis of 2007-09. That was a difficult period, which saw the Straits Times Index fall by close to two-thirds from its pre-crisis peak of 3,876 points (reached on October 2007) to its trough of 1,457 (reached on March 2009).

But yet, those companies had shouldered on admirably and continued delivering bigger rewards to shareholders (in fact, Kingsmen Creatives had even managed to grow its profits throughout that period in each consecutive year). Such track records give investors a reason to have faith in their future.

That said however, a study of their historical financial characteristics – as important as they are – cannot give us the full picture on whether their past record is really an accurate reflection of their future performance. What’s needed is a deeper look into their businesses for the presence (or absence) of competitive advantages that can allow those four companies to withstand their respective competition and continue to reward shareholders.

Do you have any thoughts on those four companies? Share them in the comments section below!

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 owns shares in Kingsmen Creatives.