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6 Blue-Chip Companies That Have Dividend Yields of More than 5%

Many Singaporean investors love to invest in income stocks as dividends can help to supplement our regular pay cheque.

Even among the blue-chip companies of the Straits Times Index (SGX: ^STI), there are a number of them that currently have a dividend yield of more than 5%, above Singapore’s long-term average inflation rate of around 3%.

Interestingly, the 5% dividend yield is also higher than the dividend yield of the SPDR STI ETF (SGX: ES3), an index tracker that replicates the fundamentals of the STI. As of 16 August 2017, the exchange traded fund (ETF) yielded 3.06%.

Let’s dive in and check out the six STI components that have a dividend yield upwards of 5%:

Source: S&P Global Market Intelligence (data as of 16 August 2017)

It is not surprising that three out of the six STI components featured above are real estate investment trusts (REITs).

REITs such as Ascendas Real Estate Investment Trust (SGX: A17U), CapitaLand Commercial Trust (SGX: C61U) and Capitaland Mall Trust (SGX: C38U) must pay out at least 90% of taxable income each year to enjoy tax exempt status by the tax authority. Due to this fact, REIT investors are usually able to enjoy a high dividend yield.

Hutchison Port Hldg Trust (SGX: NS8U) is a business trust that operates ports in Hong Kong and Shenzhen, China. Being a business trust, it does not have an obligation to distribute its income as distributions but can do so if it wishes.

Companies such as StarHub Ltd (SGX: CC3) and Singapore Press Holdings Limited (SGX: T39) can be deemed as mature companies and as such, tend to pay out most of their earnings as dividends.

The list above provides a starting point for investors who are interested in high-yielding blue-chip companies. We are not recommending that investors buy or sell any of the stocks mentioned above. The purpose here is to merely share the names of such companies for your own further research.

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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 Sudhan P owns shares in CapitaLand Commercial Trust and Capitaland Mall Trust. The Motley Fool Singapore has recommended shares of Capitaland Mall Trust.