In a recent report by the Singapore Exchange, the 10 best-performing billionaire shares, which have market capitalisations of more than S$1 billion, were revealed. The 10 companies have a focus on providing goods and services to consumers. They have averaged a total return (which includes capital gains and dividends) of 29% for 2018 year-to-date.
Of those 10 stocks, I picked the top three companies with the highest dividend yields, which have more than the average yield of 2.5% (data as of 9 November 2018).
The first company on the list with a dividend yield of 5.4% is M1 Ltd (SGX: B2F), one of the three major telcos in Singapore.
Year-to-date, the company’s total return was 26.7%. Part of the share price growth was driven by news that Keppel Corporation Limited (SGX: BN4) and Singapore Press Holdings Limited (SGX: T39) wish to gain majority control of the telco.
For the third quarter of 2018, M1’s revenue rose 10.1% to S$274.6 million, but net profit tumbled 5.3% to S$34.4 million. To know more about M1’s latest earnings, you can head here.
M1 had a market capitalisation of S$1.95 billion on 9 November 2018.
Sporting a dividend yield of 4.7%, ComfortDelGro Corporation Ltd (SGX: C52) is the next company on the list. The land transport giant, with a market capitalisation of S$4.72 billion, produced a total year-to-date return of 15.3%.
ComfortDelGro had a mixed 2018 third-quarter as well. Even though revenue climbed 8.5% to S$967.9 million, net profit slipped 2% to S$78.5 million. Summarising the latest financial performance, ComfortDelGro’s managing director and group chief executive, Yang Ban Seng, said:
“Organically, our Singapore and overseas public transport business continued to do well with higher mileages operated. The Singapore Taxi Business has shown slight improvement compared to the last quarter. Our inorganic growth has been strong. The acquisitions earlier in the year have started to contribute. For this year, we have invested over $450 million in new acquisitions in Singapore, Australia, the United Kingdom and China. We will continue to be on the look out for opportunities to grow the business.”
In a bid to grow its business further, ComfortDelGro is setting up a US$100 million corporate venture capital fund, called ComfortDelGro Capital Partners, to focus on incubation and investments in mobility technologies and solutions.
Last but not the least, Sheng Siong Group Ltd (SGX: OV8) slots into the third spot with a yield of 3.2% and a total year-to-date return of 18.4%. The supermarket chain had a market capitalisation of S$1.59 billion, as of 9 November 2018.
In a similar fate to the two companies above, Sheng Siong’s latest quarter revenue rose, but net profit fell. The former went up by 8% to S$227.9 million while the latter went down by 9.9% to S$17.7 million.
The company warned that competition in the supermarket industry is expected to remain intense, especially with a higher number of new HDB shops and large online retailers. It added that it would nurture the growth of new stores opened here in October and early November this year.
The Foolish takeaway
Stocks with high dividend yields may not always be excellent investments. A case in point would be Asian Pay Television Trust (SGX: S7OU) with its massive distribution cut yesterday. 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. The Motley Fool Singapore has recommended shares of Singapore Exchange and Sheng Siong Group Ltd. Motley Fool Singapore contributor Sudhan P owns shares in Singapore Exchange.