Temasek, which began its operations in 1974, is one of the Singapore government’s investment arms. It has been actively investing in both Singapore and foreign shores since its beginning.
As of 31 March 2017, Temasek’s net portfolio value was S$275 billion, with 29% of its investments in Singapore, and the rest in regions such as China, Rest of Asia, and North America. Since inception, Temasek’s annualised total shareholder return (in Singapore dollar terms) is a commendable 15%.
According to a recent report by bourse operator Singapore Exchange Limited (SGX: S68), Keppel Corporation Limited (SGX: BN4) is one of Temasek’s significant Singapore-listed investments and is also one of its best performing stocks over a 20-year period; in that time frame, Keppel Corp’s annualised total return, including dividends, works out to 12.8%. Other exceptional performers include DBS Group Holdings Ltd (SGX: D05) and Singapore Technologies Engineering Ltd (SGX: S63).
In this article, let’s take a look at the five Singapore stocks with the highest dividend yields that Temasek has a direct or deemed interest in:
1. Clinching the number one spot is Hutchison Port Holdings Trust (SGX: NS8U) with a distribution yield of 7.3%. In 2017, the container port operator’s revenue and other income fell 3% to HK$11.6 billion. Net profit attributable to unitholders was HK$944.2 million, 30% below that of 2016. As a result, the business trust’s distribution per unit (DPU) for 2017 came in at 20.60 HK cents, down from 30.60 HK cents in 2016.
2. With a distribution yield of 6.9%, industrial REIT Ascendas Real Estatement Investment Trust (SGX: A17U) slots into the second spot. In the quarter ended 31 December 2017 (which is Ascendas REIT’s fiscal third-quarter), the REIT saw its gross revenue grow by 4.1% year-on-year to S$217.3 million while its net property income (NPI) rose 1.7% to S$157.6 million. But, its distribution per unit slipped 0.6% to 3.97 cents.
3. Coming in third is StarHub Ltd (SGX: CC3) with a yield of 6.4%. In 2017, the telco’s revenue was stable at S$2.4 billion, but its net profit attributable to shareholders sank by 27.1% to S$249 million. The company’s total dividend for 2017 was 16.0 cents per share, down from 2016’s dividend of 20.0 cents per share. StarHub intends to maintain a quarterly cash dividend of 4.0 cents per share for 2018.
4. Sporting a distribution yield of 6.2% and winning the fourth spot is Mapletree Logistics Trust (SGX: M44U). The REIT has a portfolio of 124 logistics assets in Singapore, Hong Kong, Japan, Australia, China, Malaysia, South Korea, and Vietnam. For its fiscal third-quarter ended 31 December 2017, Mapletree Logistics Trust’s gross revenue rose 2.8% year-on-year to S$98.2 million. This drove a 3.9% increase in NPI to S$83.0 million and eventually, a 2% gain in DPU to 1.907 cents.
5. Last but not the least, with the same yield as Mapletree Logistics Trust is Mapletree Greater China Commercial Trust (SGX: RW0U). Even though both the trusts share the same sponsor – Mapletree Investments Pte Ltd – their portfolio is entirely different. Mapletree Greater China Commercial Trust’s portfolio consists of three commercial properties located in Hong Kong, Beijing, and Shanghai. In its fiscal third-quarter (the three months ended 31 December 2017), the REIT’s gross revenue inched up from S$87.8 million a year ago to S$88.5 million. Its NPI was flat at S$71.4 million, but its DPU improved by 5.1% to 1.868 Singapore cents.
Stocks with high dividend yields may not necessarily make great investments. As Foolish investors, we have to look for companies that can grow, or at least sustain, 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 Singapore Exchange Limited and DBS Group Holdings Ltd. Motley Fool Singapore contributor Sudhan P owns shares in Singapore Exchange Limited.