Many Singaporean investors like to invest in dividend shares since dividends can help to supplement a regular monthly salary.
Many of the blue-chip companies of the Straits Times Index (SGX: ^STI) provide attractive dividend yields. Let’s dive into the top five blue chips with the highest yields.
Enter the blue-chip dividend warriors
Source: SGX report (data as of 17 April 2019)
Hutchison Port Hldg Trust (SGX: NS8U) is the top dividend yielder among the Straits Times Index components with a distribution yield of 10.4%. However, don’t be fooled by the high yield. For the financial year ended 31 December 2018, distribution per unit fell by 17.5% to 17.0 HK cents, down from 20.6 HK cents. The fall came on the back of net profit attributable to unitholders (excluding one-off items) tumbling 22% to HK$737.7 million.
Next in line is Singapore Telecommunications Limited (SGX: Z74). The telco has a trailing dividend yield of 5.6% based on its trailing dividend of 17.5 Singapore cents per share. You can learn more about Singtel’s dividend policy.
Singapore Exchange Limited (SGX: S68) slots into the third spot with a trailing dividend yield of 4.8%. In the first quarter of FY2019 (fiscal year ending 30 June 2019), SGX started a new dividend policy of paying a dividend of S$0.075 per share, per quarter, which equates to a total annual dividend of S$0.30 per share. Based on that amount, the dividend yield drops to 4.1%.
Ascendas Real Estate Investment Trust (SGX: A17U), a real estate investment trust (REIT) focused on industrial properties, has a distribution yield of 4.5%. That is followed by DBS Group Holdings Ltd (SGX: D05), with a dividend yield of 4.4%. For 2018, DBS has proposed a total dividend of S$1.20 per share, a new high for the bank.
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 should 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 further research, though.
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Editor's note: The article was edited for clarity.
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 Singapore Exchange, Ascendas Real Estate Investment Trust, and DBS Group. Motley Fool Singapore contributor Sudhan P owns shares in Singapore Exchange.