If you are a dividend investor looking to diversify your investment portfolio, it could be useful to explore companies outside of Singapore for potential ideas. It might help to look at a wider pool of investment ideas and also to have some geographic diversification.
One possibility is to explore companies in Malaysia. Given the similarities between the two countries in term of culture and consumer behaviour, it might be easier for us to understand companies across the Causeway.
Here, we will look at three companies. All of them are part of the KLCI Index (KLSE: ^KLCI), which is the equivalent of our Straits Times Index (SGX: STI) in Singapore.
Malayan Banking Berhad (KLSE: 1155.KL; KLSE: MAYBANK.KL) sports a dividend yield of 6.9%. Maybank is Malaysia’s largest bank by market capitalisation. It is worth MYR79 billion. It is also one of the largest banks in Southeast Asia, with total assets exceeding US$165 billion. It reported a net profit of US$1.75 billion for 2015.
YTL Corporation Bhd (KLSE: 4677.KL; KLSE: YTL.KL) currently yields 5.6%. It is a conglomerate with various business interests such as utilities, construction contracting, cement manufacturing, property development and investment, hotel development and management, e-commerce initiatives and internet-based education solutions and services. In Singapore, YTL has a stake in Starhill Global Real Estate Investment Trust (SGX: P40U).
British American Tobacco (Malaysia) Berhad (KLSE: 4162.KL; KLSE: BAT.KL) is a RM14 billion cigarette manufacturer that yields 5.2%. The brands sold under include Dunhill, Pall Mall, Peter Stuyvesant, Benson & Hedges and Kent.
Though insightful, the above should only be used as a starting point for further research, since a high dividend yield is only one of the many criteria that an investor should consider. Investing in overseas companies also exposes investors to currency and political risks.
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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 Lawrence Nga doesn’t own shares in any companies mentioned.