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

The blue-chip shares of the Straits Times Index (SGX: ^STI) all pay a dividend, with an average dividend yield of 3.6%. However, some of the index stocks have way higher dividend yields. Here, let’s look at the top five blue-chip shares that have the best dividend yields (data as of 17 January 2019).

Blue-chip #1

Coming in first is Hutchison Port Holdings Trust (SGX: NS8U) with a distribution yield of 9.6%. In its most recent earnings update, the trust posted a net profit of HK$239.5 million, down 11.4% as compared to a year back.

The high yield should not fool investors because of late, the trust’s distributions have been falling. For the last twelve months, total distribution has dropped to 19.62 Hong Kong cents from 26.10 cents in the prior period.

Hutchison Port Holdings Trust is estimated to announce its 2018 fourth-quarter earnings on 4 February.

Blue-chip #2

Taking the second spot with a distribution yield of 5.8% is Ascendas Real Estate Investment Trust (SGX: A17U). The real estate investment trust’s sponsor, Ascendas-Singbridge, was in the news earlier this week when CapitaLand Limited (SGX: C31) announced that it is looking to acquire Ascendas-Singbridge fully.

Distribution per unit (DPU) for Ascendas REIT’s latest second quarter fell 4.2% year-on-year to 3.887 Singapore cents. During the quarter, the REIT expanded into the UK. It said that other than Singapore, its long-term strategy is to build up its portfolio in Australia, the UK and Europe.

Ascendas REIT will be announcing its financial results for the third quarter ended 31 December 2018 on 30 January 2019. Investors would be hoping there are improvements in the DPU after a weak second quarter.

Blue-chip #3

Singapore Telecommunications Limited (SGX: Z74) is third on the list with a dividend yield of 5.7%.

For the fiscal year ended 31 March 2018, the telco paid a total dividend of 20.5 cents per share, which includes a special dividend of 3.0 cents per share. Going forward, Singtel revealed 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 telco is estimated to reveal its third-quarter earnings on 8 February.

Blue-chip #4

With a dividend yield of 5.2%, global electronics services provider, Venture Corporation Ltd (SGX: V03), takes the fourth spot.

For its 2018 third-quarter, Venture’s revenue tumbled 27.4% to S$770.4 million while net profit fell 27.5% to S$80.8 million. The lower revenue was largely due to the impact arising from customers’ planned transition to new replacement products and merger and acquisition activities from some customers.

Will Venture improve its fourth-quarter earnings and subsequently increase its final dividend for 2018 from 60 cents per share dished out in 2017? Investors would know for sure when the company announces its earnings towards the end of February (estimated earnings release date is 27 February).

Blue-chip #5

Slotting into the fifth spot is CapitaLand Mall Trust (SGX: C38U) with a distribution yield of 4.9%. The retail REIT’s DPU for the 2018 third-quarter climbed 5.0% year-on-year to 2.92 Singapore cents. The increase came on the back of its gross revenue going up by 0.7% and its net property income increasing by 1.1%.

The REIT is pencilled in to announce its 2018 fourth-quarter earnings next week.

The Foolish takeaway

We should never invest based on high dividend yields alone. The dividend yield tells us nothing about the sustainability of a company’s dividend. 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 great starting point for your further research though.

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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 Ascendas Real Estate Investment Trust, CapitaLand Mall Trust and CapitaLand Limited. Motley Fool Singapore contributor Sudhan P owns shares in CapitaLand Mall Trust.