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

Who doesn’t love a steady stream of dividends coming into our bank account?

Dividends, for one, can supplement our regular pay cheque. Even among the Straits Times Index (SGX: ^STI) stocks, there are a number of companies paying market-beating dividend yields. Let’s take a look at the top five blue-chip stocks with the tastiest yields, as of 21 August 2018.

Hutchison Port Holdings Trust (SGX: NS8U) is the champion with a distribution yield of 10%. Even though the yield is high, Hutchison Port’s distribution for the second quarter ended 30 June 2018 fell 10.3% year-on-year to 8.52 Hong Kong cents per unit. For the last twelve months, total distribution has dropped to 19.62 cents from 26.10 cents in the prior period.

Sporting a dividend yield of 9.7% and slotting into the second spot is StarHub Ltd (SGX: CC3). Just like Hutchison Port’s distribution, StarHub’s dividend has fallen from 20 Singapore cents per share in 2016 to 16 cents in 2017. For 2018, StarHub has guided for a total dividend of 16 cents.

Ascendas Real Estatement Investment Trust (SGX: A17U) takes the third spot with a distribution yield of 5.9%. Distribution per unit (DPU) for its latest first quarter tumbled 1.2% year-on-year to 4.002 Singapore cents due to the absence of a one-off distribution that occurred a year ago. Excluding the one-time distribution, DPU would have increased by 4.0% year-on-year.

Dialling in to the fourth position with a dividend yield of 5.7% is Singapore Telecommunications Limited (SGX: Z74). For the fiscal year ended 31 March 2018, Singtel dished out a final dividend of 10.7 Singapore cents per share, bringing the total dividend for the year to 20.5 cents per share. The total dividend includes a special dividend of 3.0 cents per share. The overall dividend for 2018 marks an increase from 17.5 cents per share paid out one year ago.

Going forward, 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”.

The dividend trend from 2014 to 2018 for the largest telco in Singapore is shown below:Source: Singtel 2018 annual report

Singapore Press Holdings Limited (SGX: T39) takes the final spot with a dividend yield of 5.3%. The media giant paid out 15 Singapore cents per share in 2017, down from 18 cents in 2016. For the second quarter ended 28 February 2018, it dished out 6.0 cents, unchanged from the previous year.

The following shows how Singapore Press Holdings’ dividends have changed from 2013 to 2017:Source: Singapore Press Holdings 2017 earnings presentation

The Foolish takeaway

The dividend yield of a company tells us nothing about its dividend stability. As seen with Hutchison Port, StarHub and Singapore Press Holdings, companies with high dividends yields can also have a history of paying out declining dividends. Therefore, before investing in income stocks, we should always ensure that their dividend yields are sustainable.

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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 doesn’t own shares in any companies mentioned.