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

Dividends provide investors with a steady stream of cash flow. Even among the Straits Times Index (SGX: ^STI) components, there are a handful of companies that have dividend yields of more than that of the SPDR STI ETF (SGX: ES3), an exchange-traded fund that can be used as a proxy for the STI, which stood at 3%, as of 21 June 2018.

With that, let’s look at the top five STI stocks with the highest dividend yields (as of 21 June 2018):

1. StarHub Ltd (SGX: CC3) takes the top spot with a dividend yield of 9.9%. Shares in the telco have fallen more than 40% year-to-date, translating to the high dividend yield. For the first quarter ended 31 March 2018, revenue tumbled 4.7% year-on-year to S$561.0 million. The decline in the top-line was mainly due to lower revenue from mobile and pay TV services, together with lower sales of equipment. Meanwhile, net profit crashed 14.9% to S$61.5 million.

2. Coming in second is Hutchison Port Holdings Trust (SGX: NS8U), the world’s leading port network, with a distribution yield of 9.2%. For the three months to 31 March 2018, revenue and other income rose 3.5% year-on-year to HK$2.7 billion. However, profit attributable to unitholders of the trust declined by 12.9% to HK$145.4 million.

3. With a distribution yield of 6.1%, Ascendas Real Estatement Investment Trust (SGX: A17U) slots into the third spot. For the full year ended 31 March 2018, gross revenue rose 3.8% to S$862.1 million. Net property income (NPI) grew 3.0% while distribution per unit rose 1.6% to 15.99 Singapore cents. The higher NPI was largely due to full-year contributions from the properties acquired in the previous year, as well as from 100 Wickham Street in Australia, which was acquired during the latest period.

4. Taking the fourth spot is Singapore Press Holdings Limited (SGX: T39), or SPH for short. The company has a dividend yield of 5.8%. Disruption to the media industry has taken a huge toll on SPH’s business. The woes continued into its second quarter ended 28 February 2018 as total operating revenue slipped 1.8% to S$233.7 million, with the media business segment falling 7.4%. Meanwhile, its bottom-line plunged 24.9% to S$40.2 million. Going forward, the media giant said that it is focusing on its digital blueprint for the future, which includes its new all-digital subscription plans and strengthened integrated multi-platform marketing. It is also “exploring further growth in aged care and other property asset management sectors for the longer term”. In April 2017, SPH acquired nursing home provider, Orange Valley Healthcare, in a bid to diversify its revenue.

5. Singapore Telecommunications Limited (SGX: Z74), more commonly known as Singtel, takes the final spot with a dividend yield of 5.5%. Revenue for the full year ended 31 March 2018 went up 4.9% year-on-year to S$17.5 billion while net profit grew to a record S$5.5 billion, boosted by gains from the divestment of NetLink Trust to NetLink NBN Trust (SGX: CJLU) and a strong performance by its core business. Singtel said that it expects to “maintain its ordinary dividends of 17.5 cents per share for the next two financial years and thereafter, will revert to the payout of between 60% and 75% of underlying net profit”.

A stock with the highest dividend yield may not always be the best investment. As Foolish investors, we have to look for companies that can grow, or at least sustain, their dividends year-after-year. The list above can serve as a starting point for your 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 units in NetLink NBN Trust.