Companies that have the ability to raise their dividends should have great underlying businesses. On that note, let’s look at the next three blue-chip companies of the Straits Times Index (SGX: ^STI) that have increased their dividends for the 2018 financial year. For the first two, please click on the previous part here (companies discussed in that article were ComfortDelGro Corporation Ltd (SGX: C52) and DBS Group Holdings Ltd (SGX: D05)).
Property developer and investor, Hongkong Land Holdings Limited (SGX: H78), is the third company to be featured. Currently, the company owns and manages more than 850,000 square metres of real estate across Asia. Hongkong Land has two business segments, namely, investment properties and development properties.
Hongkong Land raised its total dividend for 2018 by 10% to US$0.22 per share, up from US$0.20 a year back. In terms of underlying earnings per share, the 2018 dividend gives a payout ratio of 0.50.
For the financial year ended 31 December 2018, the property giant grew its revenue by 65% to US$2.67 billion mainly due to higher sales of properties. Meanwhile, underlying net profit (excluding one-off trading items) went up 9% to US$1.04 billion. Including non-trading items such as fair value gains on revaluation of investment properties, net profit fell 56% to US$2.46 billion.
Hongkong Land shares ended Friday, 1 March, at US$7.33 apiece. At that price, it had a price-to-book (PB) ratio of 0.45 and a trailing dividend yield of 3%.
The fourth blue-chip share on the list is Oversea-Chinese Banking Corp Limited (SGX: O39), or OCBC for short. OCBC is another major bank in Singapore, together with DBS.
In 2018, OCBC increased its total dividend to S$0.43 per share, up 16% year-on-year from S$0.37 in 2017. The 2018 dividend gives a payout ratio of 0.41.
The dividend growth in 2018 was due to record earnings and a robust capital position. For the year, OCBC’s total income grew 2% year-on-year to S$9.70 billion while net profit hit a record of S$4.49 billion, climbing 11% year-on-year.
At OCBC’s closing share price of S$11.10 on 1 March, it had a PB ratio of 1.2 and a trailing dividend yield of 3.9%.
Rounding off the list of blue-chips is the third and final Singapore-listed bank, United Overseas Bank Ltd (SGX: U11), or UOB for short.
UOB raised its total dividend for 2018 by 20% to S$1.20 per share, up from S$1.00 per share in 2017 (the dividends in both years include a special dividend of S$0.20 per share in each year). The 2018 dividend gives a payout ratio of 0.52, including special dividend, and 0.43 excluding special dividend.
For the financial year ended 31 December 2018, UOB’s total income improved 6% to S$9.12 billion and net profit climbed 18% to S$4.01 billion.
UOB’s share price closed at S$25.00 on 1 March. At that price, it had a PB ratio of 1.2 and a trailing dividend yield of 4.8% (including special dividend; yield of 4% excluding special dividend).
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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, Hongkong Land Holdings Limited, Oversea-Chinese Banking Corp Limited and United Overseas Bank Ltd. Motley Fool Singapore contributor Sudhan P owns shares in Hongkong Land Holdings Limited.