If you are saving towards retirement and have S$50,000 to spare, it might be worth it to buy some dividend shares. Here are five Singapore-listed stocks I would buy with S$50,000.
No. 1: Straco Corporation
The first company on my list is Straco Corporation Ltd (SGX: S85). I would allocate 25% of my portfolio, or S$12,500, into it.
Straco has been a great dividend payer; from 2006 to 2018, its dividends have grown by 25% per year, which is very commendable. Straco also has a strong balance sheet with S$209.8 million in cash hoard and just S$34.9 million in total debt as of 31 March 2019. With the huge cash balance, Straco is well-positioned to acquire earnings-accretive tourism attractions when the opportunity arises.
At Straco’s share price of S$0.74, it has a dividend yield of 4.7%, including the special dividend paid out in the fourth quarter of 2018.
No. 2: VICOM
VICOM Limited (SGX: V01) is next, also with a 25% allocation.
Just like Straco, VICOM has been rewarding shareholders well over the long term. My Foolish colleague Royston Yang wrote that “VICOM paid out a dividend net of taxes of 2.22 Singapore cents in FY 1999; for FY 2018, the total dividend was 45.25 Singapore cents,” representing an annualised growth of 16.3%. With a rosy outlook, as noted previously, VICOM has the potential to further increase its total dividends in the coming years.
At VICOM’s share price of S$6.82, it has a dividend yield of 6.6%, including the special dividend paid out in its 2018 fourth quarter.
No. 3: Singapore Exchange Limited
The third company to buy would be Singapore Exchange Limited (SGX: S68), or SGX. I would set aside 20% of my portfolio, or S$10,000, into it.
Straco, VICOM, and SGX have been paying increasing dividends over the years. From 2001 to 2018, the only stock market operator in Singapore increased its dividend 10.5% annually, from 5.5 Singapore cents per share to 30 Singapore cents. SGX aims to “pay a sustainable and growing dividend over time, consistent with the company’s long-term growth prospects.”
Retirees will especially like SGX as it pays out dividends every three months. At SGX’s share price of S$7.70, it has a dividend yield of 3.9%.
No. 4: CapitaLand Mall Trust
CapitaLand Mall Trust (SGX: C38U) is the fourth company on the list with a 15% allocation (S$7,500).
From 2002 to 2018, CapitaLand Mall Trust’s distribution per unit (DPU) climbed from 3.38 Singapore cents to 11.50 Singapore cents. The increase translates to an annualised distribution growth of around 8%. Going forward, the DPU could grow further with a full-year contribution from the acquisition of Westgate in 2018 and the opening of Funan at the end of June 2019.
At CapitaLand Mall Trust’s unit price of S$2.57, it has a distribution yield of 4.5%.
No. 5: NetLink NBN Trust
NetLink NBN Trust (SGX: CJLU) is the final stock taking the last 15% allocation. NetLink NBN Trust just went public in July 2017. For its 2019 fiscal year, the business trust’s DPU was 4.88 Singapore cents, exceeding the initial public offering (IPO) DPU projection by 5.2%. In the years ahead, growth for NetLink NBN Trust could come from Singapore households who are not on fibre connections and new housing estates.
At NetLink NBN Trust’s unit price of S$0.875, it has a distribution yield of 5.0%.
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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 Straco Corporation Ltd, VICOM Limited, Singapore Exchange, and CapitaLand Mall Trust. Motley Fool Singapore contributor Sudhan P owns shares in Straco Corporation Ltd, VICOM Limited, Singapore Exchange, CapitaLand Mall Trust, and NetLink NBN Trust.