Singapore Post Limited (SGX: S08) (SingPost) used to be a darling dividend share of the past, giving out generous dividends to throngs of income investors. For example, in July 2011, it used to yield close to 6%.
However, of late, its dividends have been cut, falling to 3.50 Singapore cents per share for its financial year ended 31 March 2019 (FY2018/19), down from 6.25 Singapore cents in FY2010/11. At SingPost’s current share price of S$0.96, it has a dividend yield of 3.6%, down drastically from its heydays. Therefore, you would think that there are better dividend shares out there in the Singapore stock market. Here are three of them for you to consider.
Dividend share #1
The first dividend stock featured is DBS Group Holdings Ltd (SGX: D05), the largest bank in Singapore. The bank’s earnings have grown consistently from 2014 to 2018. With that, its dividend per share has climbed from S$0.58 to S$1.20 during the same period, translating to a 20% rise annually.
DBS lately reiterated that its policy of paying sustainable dividends that increase progressively with earnings remains the same. Therefore, as long as profits keep up in the years to come, DBS shareholders can expect to receive higher dividends.
DBS shares are now going at S$26.46 each. At that share price, it has a dividend yield of 4.5%.
Dividend share #2
Singapore’s only stock market operator, Singapore Exchange Limited (SGX: S68) (SGX), is the next dividend share. From FY2014 to FY2018 (the company has a 30 June year-end), the company’s earnings per share climbed from S$0.30 to S$0.339.
During the same time frame, its dividend has increased from S$0.28 per share to S$0.30 per share. The FY2018 dividend marked the highest annual dividend in 10 years, showing the prowess of SGX’s business. Starting from FY2019, SGX revised its dividend policy as follows (emphases are mine):
“From FY2019, SGX will revise its dividend policy from one based on a percentage of net profit, to one based on an absolute amount. The new policy aims to pay a sustainable and growing dividend over time, consistent with the company’s long-term growth prospects. This will provide flexibility for SGX to balance its dividend payments with the need to retain earnings to support growth. SGX will pay a higher dividend of 7.5 cents per share per quarter, starting from the first quarter of FY2019.”
At its current share price of S$7.82, SGX sports a dividend yield of 3.8%.
Dividend share #3
Last, but not least, is VICOM Limited (SGX: V01), Singapore’s top provider of inspection and technical testing services. From 2014 to 2018, VICOM’s total dividend (including special dividend) rose from S$0.27 per share to S$0.4525 per share, which is a far cry from the cut in SingPost’s dividends.
Going forward, shareholders could be rewarded with higher dividends since VICOM’s business seems to be picking up of late. VICOM’s shares are currently selling at S$6.96 apiece. At that share price, it has a dividend yield of 5.3%, excluding the 2018 special dividend, and 6.5% including the 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, Singapore Exchange, and VICOM. Motley Fool Singapore contributor Sudhan P owns shares in Singapore Exchange and VICOM.