Here Are The 5 Stocks In Singapore With The Highest Dividend Yields, According to the FTSE All-World High Dividend Yield Index

According to a recent report from Singapore’s bourse operator Singapore Exchange Limited (SGX: S68), the FTSE All-World High Dividend Yield Index is a collection of over 1,190 dividend-paying stocks that are listed around the world.

The index utilises a dividend yield ranking process and excludes real estate investment trusts (REITs) as well as stocks that are forecast to have a dividend of zero over the next 12 months.

Singapore’s stock market has 25 companies which are in the FTSE All-World High Dividend Yield Index. Here are the five Singapore stocks with the highest yields (figures as of 3 January 2017 unless otherwise stated):

  1. Hutchison Port Holdings Trust (SGX: NS8U) tops the list with a trailing dividend yield of 8.4%. But some caution from investors might be warranted. The business trust had reduced its distribution per unit for the first half of 2016 by 10.8% when compared to a year ago. This followed a 19% cut in its distribution per unit for the whole of 2015. Business conditions still look challenging for the trust in its latest earnings release for the third quarter of 2016. Hutchison Port Holdings Trust also recorded a negative return of 7.9% in 2016.
  2. In second place is M1 Ltd (SGX: B2F). The telco sports a yield of 7.8%. The arrival of a fourth telco in Singapore’s market may be raising concerns from investors, thereby weighing on M1’s shares. Furthermore, M1 is finding itself in a data-package price war with its peers. The company had cut its dividend by 19% in 2015. M1’s shares recorded a total loss of 23.6% in 2016.
  3. Another telco, Starhub Ltd (SGX: CC3), sits in third spot with a 7.1% dividend yield. The company is in a similar picture to M1 in that the presence of a fourth telco and ongoing price wars could be factors weighing on its share price. But unlike M1, StarHub’s dividend of $0.20 per share in 2015 was unchanged from 2014. Management also has the intention to keep the dividend unchanged for 2016. StarHub’s shares has recorded a total loss of 19.5% in 2016.
  4. Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6) lands in the fourth spot with a trailing dividend yield of 5.4%. The shipbuilder, though, recorded a negative total return of 22.3% in 2016. The company’s dividend was reduced from S$0.055 per share in 2014 to S$0.045 in 2015.
  5. The fifth place belongs to Keppel Corporation Limited (SGX: BN4). The oil & gas and property development conglomerate sports a trailing dividend yield of 5.1%. In recent quarters, the company has been dogged by a range of problems such as the bankruptcy of a major customer (the Brazil-based Sete Brasil) and a tough operating environment. The company’s dividends for the whole of 2015 and the first half of 2016 were both slashed by around 30% when compared to their respective year-ago periods. Keppel Corporation’s shares recorded a negative total return of 6.3% in 2016.

There is usually a good reason why a certain company or REIT is offering a high dividend yield. Each of the five companies listed above have unique challenges that they are facing and most of them have also reduced their dividends recently.

As investors, it is our duty to find out whether the business challenges confronting any particular stock are surmountable and if so, how long the issues will take to be resolved.

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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.