MENU

Here Are The 5 Blue Chips With The Highest Dividend Yields At The Start Of 2017

Another year has come to an end and it is a good time to tally up the scores.

recent report by Singapore Exchange Limited (SGX: S68) scored all the 30 stocks that make up the Straits Times Index (SGX: ^STI) – the 30 are often referred to as blue chips – and provided information on their dividend yields at the end of 2016. It might be worth taking a look at the blue chips and see what had transpired in 2016.

With this in mind, here’re five blue chips with the highest dividend yields at the end of 2016 (figures as of 30 December 2016 unless otherwise stated):

  1. Hutchison Port Holdings Trust (SGX: NS8U) tops the list with a trailing dividend yield of 8.3%. Some caution might be warranted here. In the first-half of 2016, the business trust reduced its distribution by 10.8% compared to a year ago. Business conditions still look challenging for the trust in its latest quarter. Hutchison Port Holdings Trust also recorded a negative return of around 8% in 2016.
  2. The next highest yield comes from Starhub Ltd (SGX: CC3). The telco sports a yield of 7.1%. The arrival of a fourth telco in Singapore’s shores might be raising concerns amongst investors and weighed on StarHub’s stock price. Furthermore, StarHub is finding itself in a data-package price war with its peers. But, the company’s management team intends to keep the company’s dividend for the whole of 2016 at the same level as 2015’s. StarHub’s shares recorded a negative total return of 19.5% in 2016.
  3. In third place is CapitaLand Mall Trust (SGX: C38U). The retail real estate investment trust (REIT) has a distribution yield of 5.9%. Concerns for the REIT include possible interest rate hikes and a tough retail operating environment in Singapore. CapitaLand Mall Trust delivered a total return of 3% in 2016.
  4. CapitaLand Mall Trust’s sister REIT, CapitaLand Commercial Trust (SGX: C61U), weighs in at fourth spot with a similar distribution yield of 5.9%. As its name suggests, the REIT owns commercial properties. Historically, the commercial property sector can be volatile. Furthermore, there was a huge spike in office supply in 2016 which might take a few years to be absorbed by the market. CapitaLand Commercial Trust delivered 16.6% in total return in 2016.
  5. Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6) lands in the five spot with a trailing dividend yield of 5.5%. The shipbuilder, though, recorded a negative total return of 22.3% in 2016. The company, which has a market cap of $3.1 billion, reduced its dividend from S$0.055 per share in 2014 to S$0.045 in 2015.

There is usually a good reason as to why companies or REITs are offering high yields. As investors, it is our duty to find out the possible reasons and decide whether the concerns are valid or not. In doing so, we can make better investing decisions.

For more stock analyses and investing tips, sign up here for your FREE subscription to The Motley Fool's weekly investing newsletter, Take Stock SingaporeIt will teach you how you can grow your wealth in the years ahead.

Like us on Facebook to follow our latest hot articles. The Motley Fool's purpose is to help the world invest, better.

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 and units of CapitaLand Mall Trust. Motley Fool Singapore contributor Chin Hui Leong owns units in CapitaLand Mall Trust.