The Top 5 Dividend Giants in Singapore

According to a recent report from bourse operator Singapore Exchange Limited (SGX: S68), there are some 102 companies in Singapore’s stock market with a market capitalisation above S$1 billion.

These sizable companies come from a range of industries and almost all of them offer a dividend. I further narrowed down the list of 102 to the top 20 by market capitalisation and from there, I picked out the five with the highest dividend yields.

The SPDR STI ETF (SGX: ES3), an exchange traded fund that mimics the fundamentals of the Straits Times Index (SGX: ^STI), could make for useful context on the yields of those five billion-dollar companies. As of 23 August 2016, the SPDR STI ETF was offering a dividend yield of 3.2%.

Here’re what I found out about the five companies from Singapore Exchange’s report and elsewhere (figures as of 15 August 2016, unless otherwise stated):

  1. Keppel Corporation Limited (SGX: BN4) has the highest dividend yield at 5.6%. But, the marine engineering and property development conglomerate has produced negative total returns over the last one, three, and five years. Keppel Corporation had also cut its interim dividend in 2016 by 33% and warned of a long and harsh winter ahead.
  2. The next company on the list is Oversea-Chinese Banking Corp Limited (SGX: O39), or OCBC for short. OCBC is one of Singapore’s big banking trio and has a dividend yield of 4.3%. In its latest quarter, the second-quarter of 2016, the bank kept its dividend unchanged from the year before.
  3. Singapore’s largest listed company, Singapore Telecommunications Limited (SGX: Z74), is also among the highest dividend payers. It offers a dividend yield of 4.1%. For its financial year ended 31 March 2016 (FY2016), Singtel’s dividend exceeded its free cash flow. Investors might want to observe if this situation persists in the future.
  4. Singapore Airlines Ltd (SGX: C6L) flies in with a dividend yield of 4.1% as well. For its financial year ended 31 March 2016, Singapore Airlines increased its dividend by over 100%. Investors might want to look a little further back, though. The airline operator has had a patchy long-term track record when it comes to maintaining the level of its dividend.
  5. Another banking giant, DBS Group Holdings Ltd (SGX: D05), rounds out our gang of five with a 4.0% dividend yield. Recently, DBS was caught by surprise when one of its customers, the oil & gas support services provider Swiber Holdings Limited (SGX: BGK), decided to file for liquidation. The latter has since backed away from the liquidation decision and filed for judicial management instead.

It turns out that the five highest yielding billion-dollar companies all have yields that exceed the broader market’s. High trailing dividend yields can look tasty for investors, but it tells us nothing about the future. It’s also worth noting that a company’s size alone does not act as a protection against dividend cuts – Keppel Corp is a good example.

As Foolish investors, we might want to put our thinking hats on to figure out whether a company – regardless of its size and trailing yield – can sustain or grow its dividend.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.The Motley Fool Singapore has recommended shares of Singapore Exchange. Motley Fool Singapore contributor Chin Hui Leong doesn’t own shares in any companies mentioned.