Singapore’s Top 5 Blue-Chip Stocks with the Highest Dividend Yields

Since opening this week at 3243 points, the Straits Times Index (SGX: ^STI) has gained 18.8% as compared to 2016’s closing level of 2881 points. According to a recent report by Singapore Exchange Limited (SGX: S68), this is the strongest annual price performance for the Singapore stock market since 2012, when the STI rose 19.7%.

With dividends added to the fray, the year-to-date total returns would have been 22.2%. The report added that the Singapore benchmark has “one of the region’s highest dividend yields”; the average dividend yield of the 30 STI components is 3.3%.

With that, here are the top five blue-chip stocks with the highest yields:

1. Stealing the top spot is Hutchison Port Holdings Trust (SGX: NS8U) with a distribution yield of 8.3%. However, the yield looks ominous. Last year, the container port operator cut its distribution by 11%. To make things worse, the first nine months of this year saw a further 32.1% reduction in distribution.

2. Next in line with a yield of 6.7% is Ascendas Real Estatement Investment Trust (SGX: A17U). For the full year ended 31 March 2017 (FY16/17), the industrial REIT’s distribution per unit (DPU) increased by 2.5% year-on-year. For the second quarter of FY17/18, the REIT’s DPU went up another 1.1% as compared to a year ago. Despite the continued headwinds in the industrial property sector due to new supply, Ascendas REIT has managed to increase its DPU.

3. StarHub Ltd (SGX: CC3) comes in third with a yield of 5.8%, based on a trailing dividend per share of 17 cents. However, as guided by its management, 2017’s dividends are expected to come in at 16 cents per share. This would reduce the dividend yield slightly to 5.5%.

4. Transport giant, ComfortDelGro Corporation Limited (SGX: C52), parks into the fourth spot; it has a dividend yield of 5.5%. Poor business showing has driven down the stock price to a low of S$1.91, a 19.4% year-to-date decline. Keen competition, mainly in its taxi business, has affected the firm’s top line. For the third quarter ended 30 September 2017, ComfortDelGro’s taxi revenue saw a 2% year-on-year slump to S$298.3 million.

5. Slotting into the fifth place is CapitaLand Mall Trust (SGX: C38U), with a yield of 5.3%. The retail REIT’s DPU fell 1.1% year-on-year in 2016. For the first nine months of 2017, CapitaLand Mall Trust managed to eke out a 0.1% increase in its DPU, despite the soft retail market.

As seen with some of the companies above, a stock with the highest dividend yield may not always be the best investment. As investors, we have to look for companies that can grow, or at least sustain, their dividends year-after-year.

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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 units of CapitaLand Mall Trust and shares of Singapore Exchange Limited. Motley Fool Singapore contributor Sudhan P owns units in CapitaLand Mall Trust and shares in Singapore Exchange Limited.