Dividend investors favour companies that increase their dividends on a consistent basis. On that note, let’s look at two blue-chip companies of the Straits Times Index (SGX: ^STI) that have increased their dividends for the 2018 financial year.
ComfortDelGro Corporation Ltd (SGX: C52) is the first company to be featured. ComfortDelGro is one of the largest land transport companies in the world with operations in several countries, including Singapore.
In 2018, the company raised its total dividend by around 1% to S$0.105 per share, up from S$0.104 per share one year back. The 2018 dividend represents a payout ratio of 0.75.
ComfortDelGro’s dividend increase came on the back of its revenue for the year growing by 6.4% year-on-year to S$3.81 billion while its net profit inched up by 0.6% to S$303.3 million.
Looking ahead, the company said that revenue from its taxi business is “expected to be maintained amidst the keener competitive environment”. ComfortDelGro’s taxi business has been hit in recent times by the proliferation of ride-hailing apps.
At ComfortDelGro’s closing share price of S$2.45 yesterday, it had a trailing price-to-earnings ratio of around 18 and a trailing dividend yield of 4.3%.
The second company is Singapore’s largest bank DBS Group Holdings Ltd (SGX: D05).
DBS increased its total dividend from S$0.93 per share in 2017 (excluding the special dividend of S$0.50 for the bank’s 50th anniversary and one-time return of capital buffer) to S$1.20 per share in 2018. The latest dividend represents a growth of 29% year-on-year, and a dividend payout ratio of 0.56.
In 2018, DBS’ total income increased by 11% to a record S$13.18 billion while net profit surged 28% to a new-high of S$5.63 billion. Return on equity (ROE) rose from 9.7% to 12.1%, the highest in more than 10 years. To know more about DBS’ latest earnings, you can head here.
The bank expects a high single-digit income growth in 2019 and its ROE to show further improvement.
DBS’ share price closed at S$25.18 yesterday. At that price, it had a price-to-book ratio of 1.4 and a trailing dividend yield of 4.8%.
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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 DBS Group Holdings Ltd. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.