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Singapore’s Top 5 Blue-Chips Offering Above-Average Dividend Yields

The Straits Times Index (SGX: ^STI), Singapore’s key stock market barometer, has had a rough 2018, falling 9.1% from the start of this year until the end of November.

Apart from being well-known among investors, the STI’s 30 component companies are also known for their dividends. But some blue-chips are offering a higher yield compared to the rest.

With that in mind, let’s have a look at the top five dividend-paying stocks on the STI (data as of 30 November 2018).

  1. Hutchison Port Holdings Trust (SGX: NS8U) or ‘HPH Trust’is the world’s first publicly traded container port business trust that owns and operates five ports in Hong Kong and Mainland China. The trust also tops the list with a distribution yield of 9.6%. Investors, however, should view the high distribution yield by HPH Trust with caution. The container port operator had cut its distribution per unit in 2017 by 20% compared to 2016. Similarly, the trust had also reduced its 2018 distribution by 24.4% compared to 2017.
  2. Ascendas Real Estate Investment Trust (SGX: A17U) takes second place with a distribution yield of 6.2%. As a brief background, Ascendas REIT is an owner and manager of industrial properties in three countries, Singapore, Australia, and the US. For its financial year ending 31 March 2018 (FY17/18), the REIT’s distribution per unit (DPU) increased by 1.55%. The increase was a slight reduction from the previous fiscal year FY16/17 when the REIT reported a 2.5% increase in distribution per unit (DPU).
  3. The third position belongs to Singapore Telecommunications Limited (SGX: Z74), a global communication technology company. Singtel’s dividend yield at the end of November this year was a respectable 5.7%. Singtel’s core dividend has remained the same over the past four years from 2015 to 2018. To be sure, the telco paid a special dividend of $S0.03 in 2017 following the listing of its associate, NetLink NBN Trust (SGX: CJLU).
  4. CapitaLand Commercial Trust (SGX: C61U) is next on the list with a distribution yield of 5.0%. Capitaland Commercial Trust is the owner and manager of 10 commercial properties located in Singapore and Germany. In 2017, the commercial REIT saw its distribution per unit (DPU) decline to 8.66 cents, down from 9.08 cents in 2016. The drop in 2017’s distribution was attributed to the issuance of new units which resulted in a larger unit base.
  5. Yet another REIT, CapitaLand Mall Trust (SGX: C38U) rounds out the list with a distribution yield of 5%. The REIT saw its DPU increase by 0.2% from 2016 to 2017. This increase was a positive development after the REIT decreased its 2016 DPU by 1%, compared to 2015. The REIT is in the process of redeveloping its Funan property which is scheduled to reopen in 2019. CapitaLand Mall Trust has also recently acquired the remaining 70% stake in Westgate Mall which it did not own.

For context, the SPDR STI ETF (SGX: ES3), an exchange-traded fund that mimics the STI, currently offers a yield of 3.6%, as of 16 December 2018.

All five of the companies above have come out above the SDPR STI ETF in terms of dividend yield, but that alone is not an invitation to invest in the quintet. Instead, investors should pay attention to the sustainability of the company’s yield offered. If investors can find a company that can sustain or even grow their dividends over the long-term, the stock could be a candidate for investment.

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The Motley Fool Singapore contributor Esjay contributed to this article. Esjay owns shares in CapitaLand Mall Trust, CapitaLand Commercial Trust and Singtel.

The information provided is for general information purposes only and is not intended to be personalized investment or financial advice. The Motley Fool Singapore has recommendations for shares of CapitaLand Commercial Trust, Ascendas REIT, and CapitaLand Mall Trust. The Motley Fool Singapore writer Chin Hui Leong owns shares in CapitaLand Mall Trust.