Singapore’s Top 5 Dividend-Paying Blue-Chip Stocks

Blue chips stocks, or the 30 constituents of the Straits Times Index (SGX: ^STI), are well-known companies among Singapore investors.

This group of companies are often prized for their dividends. For context, the SPDR STI ETF (SGX: ES3), an exchange traded fund that mimics the fundamentals of the Straits Times Index, is offering a yield of 2.93% as of 10 November 2017.

The 30 constituents in the Straits Times Index offer varying levels of dividends. Using our data provider, S&P Global Market Intelligence, I ran a screen to rank the Straits Times Index’s constituents by their yields.

Here are the five highest-yielding blue chips (figures as of 13 November 2017):

1. Hutchison Port Holdings Trust  (SGX: NS8U) tops the list with a trailing distribution yield of 7.96%. But don’t rejoice just yet. The container port owner and operator had cut its distribution per unit in 2015 by 16%. In 2016, the business trust further reduced its distribution by 11%. To add to the pain, the first nine months of 2017 saw yet another 32.1% cut in distributions.

2. Ascendas Real Estate Investment Trust (SGX: A17U) takes second place with a distribution yield of 6.74%. For its financial year ending 31 March 2017 (FY16/17), the real estate investment trust’s (REIT) distribution per unit (DPU) increased by 2.5% amid headwinds in the industry. For the first half of FY17/18, the REIT’s DPU increased another 2.7% year-on-year. The increase came as Chia Nam Toon, the chief executive officer of the REIT’s manager, resigned for personal reasons in late October.

3. Local telco StarHub Ltd (SGX: CC3) is offering the third highest yield at 5.6%, based on a trailing dividend per share of 17 cents. However, its dividends are expected to fall as StarHub’s management has guided for dividends of 16 cents per share for the whole of 2017. Furthermore, StarHub recorded lower revenue in three out of its four business segments for the first nine months of 2017. Competitive pressure is also expected to rise when Singapore’s fourth telco makes its debut in 2018.

4. Media giant Singapore Press Holdings Limited (SGX: T39) is offering a distribution yield of 5.56%, making it the fourth highest yield in the group. SPH paid 20 cents per share in dividends for its financial year ended 31 August 2015 (FY2015). Unfortunately, the company’s dividend fell to 18 cents per share in FY2016, and further down to 15 cents per share in FY2017.

5. Last but not least, CapitaLand Mall Trust (SGX: C38U) rounds out the list with a trailing distribution yield of 5.48%. The REIT’s DPU slipped 1% from 2015 to 2016. For the first nine months of 2017, CapitaLand Mall Trust has been able to maintain its DPU. The REIT is in the process of redeveloping Funan Digitalife Mall amid a soft retail environment.

The stock with the highest dividend yield is not always the best dividend stocks. As investors, we should be looking for companies that can sustain – or even better, grow – their dividends over the long-term.

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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 CapitaLand Mall Trust. Motley Fool Singapore contributor Chin Hui Leong own units in CapitaLand Mall Trust.