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Five of the STI’s Highest Dividend Stocks

With three weeks before 2015 begins, the Straits Times Index (STI) has generated a 5.0% price gain in 2014 with just over 3.0% in dividend returns, taking the total return to 8.0%. This has brought the three year average annualised total return to 9.4%.

This year’s lower STI volatility also meant that the 8.0% year to date total return was achieved with relatively more price stability than experienced in the preceding two years. However, this was not necessarily a new norm, as it was noted in previous updates that STI volatility did make a return towards normalised levels in October.

Meanwhile, the 12 month dividend yield remained relatively indifferent to previous years. Note not all the STI stocks have completed their dividend books for 2014. Singapore Telecommunications Ltd, or Singtel (SGX:Z74) shares will go ex-divided on Friday 19 December. This interim dividend for Singtel shares amounts to S$0.068 per share which is almost 1.7% of the current share price. Given Singtel represents one-tenth of the STI’s capitalisation, the STI dividend return for 2014 would be expected to increase by 0.17% come 19 December.

The five STI stocks that currently maintain the highest indicative dividend yields are Hutchison Port Holdings Trust (SGX:NS8U), Ascendas Real Estate Investment Trust (SGX:A17U), CapitaMall Trust (SGX:C38U), Keppel Corp Ltd (SGX:BN4) and Starhub Ltd (SGX:CC3). Together the five stocks average a 5.8% indicative yield – which means an S$10,000 investment spread evenly over the five stocks would be expected to yield S$580 in dividends over the next 12 months.

Two of these five stocks pay dividends on a quarterly basis, while three pay dividends on a semi-annual basis. In the year to date, the five stocks, weighed by oil rig builder Keppel Corp, averaged a price decline of 3.4% – however putting dividends into the frame the five stocks averaged a 2.3% total return.

Name SGX Code Market Cap: S$B Dvd Ind Yld % Dvd 12M Yld – Net % Dvd

Freq

Total Return YTD % Px Chg Pct YTD % GICS SubInd Name
HUTCHISON PORT HOLDINGS TR-U NS8U 7.7 7.1 7.8 Semi-annual 14 5.6 Marine Ports & Services
ASCENDAS REAL ESTATE INV TRT A17U 5.5 6.3 6.3 Semi-annual 12.4 5.5 Industrial REITs
CAPITAMALL TRUST C38U 6.8 5.5 5.4 Quarterly 9.5 3.7 Retail REITs
KEPPEL CORP BN4 15.0 5.1 5.1 Semi-annual -23.2 -26.1 Industrial Conglomerates
STARHUB CC3 7.0 5.0 5.0 Quarterly -1.2 -5.8 Wireless Telecommunication Services

Source: Bloomberg (data as of 5 December 2014)

Hutchison Port Holdings Trust (SGX:NS8U)

Hutchison Port Holdings Trust, together with its subsidiaries, invests in, develops, operates, and manages deep-water container ports in Guangdong Province of China, Hong Kong, and Macau. On 27 October 2014, the company reported operating profit for the quarter ended 30 September 2014, increased 3.5% year-on-year, from HK$1.19 billion to HK$1.24 billion. Hutchison Port Holdings Trust has a market capitalisation of S$7.7 billion and generated 12 months dividend net yield of 7.8% which was the highest among the 30 STI stocks. The trust went ex-dividend on 1 August 2014, distributing HK$0.187 per share in dividends.

Ascendas Real Estate Investment Trust (SGX:A17U)

Ascendas Real Estate Investment Trust (REIT) is a real estate investment trust launched and managed by Ascendas Funds Management (S). The fund invests in the real estate markets of Singapore and China. On 23 October 2014, the company reported net property income for the quarter ended 30 September 2014, increased 7.0% year-on-year, from S$107 million to S$115 million. Ascendas REIT has a market capitalisation of S$5.5 billion and generated 12 months dividend net yield of 6.3%. The trust went ex-dividend on 29 October 2014, distributing S$0.073 per share in dividends. Read about the future of the trust here.

CapitaMall Trust (SGX:C38U)

CapitaMall Trust (CMT) is a publicly owned real estate investment arm of CapitaLand. CMT owns and invests in income-producing assets which are used, or predominantly used, for retail purposes primarily in Singapore. On 17 October 2014, the company reported distributable income for the quarter ended 30 September 2014, increased 5.6% year-on-year, from S$88.8 million to S$93.7 million. CMT has a market capitalisation of S$6.8 billion and generated 12 months dividend net yield of 5.4%. The trust went ex-dividend on 24 October 2014, distributing S$0.0272 per share in dividends. Read analyses on CapitaMall Trust here and here.

Keppel Corp Ltd (SGX:BN4)

Keppel Corporation primarily engages in the marine, property, and infrastructure businesses. It operates in Brazil, China, Singapore, the United States, and other countries. Keppel Corporation’s Infrastructure segment offers environmental engineering, power generation, logistics, and data center services. On 21 October 2014, the company reported revenue for the quarter ended 30 September 2014, increased 8.1% year-on-year, from S$2.9 billion to S$3.2 billion.  Keppel Corporation has a market capitalisation of S$15.0 billion and generated 12 months dividend net yield of 5.1%. The stock went ex-dividend on 31 July 2014, distributing S$0.12 per share in dividends. Read analyses of Keppel here and here.

Starhub Ltd (SGX:CC3)

StarHub, an integrated info-communications company, provides a range of information, communications, and entertainment services for consumer and corporate markets in Singapore.  On 5 November 2014, StarHub reported operating revenue for the quarter ended 30 September 2014, increased 2% year-on-year, from S$578.8 million to S$592.0 million. StarHub has a market capitalisation of S$7.0 billion and generated 12 months dividend net yield of 5.0%. The stock went ex-dividend on 11 November 2014, distributing S$0.05 per share in dividends. Read an analysis on Starhub here.

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