Is Keppel Corporation Limited The Industrial Company In Singapore With The Best Dividend Yield?

The Singapore stock market boasts 19 primary-listed industrial companies with market capitalisations of more than S$1 billion.

It turns out that all but two industrial companies pay a dividend. A recent report provided some insights into the dividend yields and the performances of these billion-dollar industrial companies. Here’re some highlights from the report (figures as of 13 May 2016, unless otherwise stated):

  1. There are many flavors to the industrial space. Industrial companies may come from the air freight industry, land transport services providers, or the oil and gas sector.
  2. The SPDR STI ETF (SGX: ES3), an exchange traded fund that mimics the fundamentals of Singapore’s stock market benchmark, the Straits Times Index (SGX: ^STI), may serve as a good measuring stick for the dividend yields of individual companies. As of 30 May 2016, the SPDR STI ETF has a dividend yield of 3.5%.
  3. Singapore Airlines Ltd  (SGX: C6L) is the largest listed industrial company. It had a market cap of $13.1 billion and offered a dividend of over 4%. But, the airline operator’s total returns over the last five years were actually negative.
  4. Singapore Technologies Engineering Ltd (SGX: S63) occupied second place in the market cap standings. The engineering conglomerate offered a dividend yield of 3.2% and had logged in a total return of 24% over the last five years. Oil & gas and property development conglomerate Keppel Corporation Limited (SGX: BN4) came in third in terms of market cap. The company offered a fat dividend yield of 6.6% but had turned in disappointing total returns of a negative 43% in the past five years.
  5. Keppel Corporation and its peer, Sembcorp Marine Ltd (SGX: S51), both expect a tough operating environment in the year ahead. This could be why the duo were offering above average dividend yields; Sembcorp Marine had a dividend yield of 3.9%. We should also note that both companies had cut their dividends recently.
  6. Land transport provider Comfortdelgro Corporation Ltd  (SGX: C52) and airline catering firm SATS Ltd (SGX: S58) have been outperformers over the past five years. The duo have logged in total returns of over 100% in that period. Both sported a dividend yield of 3.2%.

The best income stocks may not be those with a high dividend yield. Each income stock comes with a different risk profile. As Foolish investors, we might want to put our thinking hats on to find the companies with dividends that are sustainable and if possible, have the ability to grow over the long term.

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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 Chin Hui Leong doesn’t own shares in any companies mentioned.