There are 26 Singapore-listed shares in the FTSE All-World High Dividend Yield Index. This global dividend yield index contains 1,389 globally-listed shares that have a higher-than-average dividend yield. The index excludes real estate investment trusts (REITs) and stocks that are forecast to pay no dividend over the next 12 months.
Here, let’s look at the best five Singapore-listed companies – part of the FTSE All-World High Dividend Yield Index – that have the highest dividend yields (yield data as of 18 January 2019).
The best of the lot
Taking the top spot is the Straits Times Index’s (SGX: ^STI) highest yielding component, Hutchison Port Holdings Trust (SGX: NS8U). The trust has a distribution yield of 9.9%. Investors should not be misled by the high yield as the trust’s distributions have been falling of late. Distribution per unit for the trailing twelve months has declined by 33% to 19.62 Hong Kong cents from 26.10 cents in the prior period.
StarHub Ltd (SGX: CC3) comes in the second place with a dividend yield of 9%. Just like Hutchison Port, StarHub did not fare well on the dividend-sustainability front. The telco’s dividend has tumbled 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. To know more about StarHub’s dividends, you can head here.
Slotting into the third place is StarHub’s peer, Singapore Telecommunications Limited (SGX: Z74). The largest telco in Singapore has 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, including a special dividend of 3.0 cents per share.
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”.
Yet another telco, M1 Ltd (SGX: B2F) is among the world’s best dividend-yielding companies with a 5.5% dividend yield. However, its dividend payout has been coming down too. In 2017, M1 decreased its total dividend to 11.4 cents per share, down from 12.9 cents per share dished out in 2016.
For a comparison of Singtel’s and M1’s dividends, you can check out the article here.
Last but not the least, Venture Corporation Ltd (SGX: V03) takes the fifth spot with a dividend yield of 5.3%. In 2017, Venture increased its dividend payout by 20% from 50 cents per share to 60 cents per share.
The electronics services provider doled out a surprise dividend of 20 cents per share for the 2018 second-quarter. Venture last rewarded shareholders with a special dividend in 2007, when earnings hit a peak then. The company typically only pays a final dividend yearly.
The Foolish takeaway
As can be seen above, companies with the best dividend yields may not necessarily make good investments. Before investing in any dividend shares, we should thoroughly research on whether their dividends are sustainable by looking at the dividend payout ratio, among other metrics. Only then can we make a holistic assessment of an income share. [Editor’s note: For five more dividend shares to make a total of 10, check out the article here.]
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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.