Singapore's Top 5 Dividend-Paying Blue-Chip Stocks
By Chin Hui Leong
Blue chips, or the 30 stocks that make up the Straits Times Index (SGX: ^STI), tend to be well-known amongst investors in Singapore.
A recent SGX report* provided some insights to the dividend yields of these 30 blue-chip stocks.
The yield of the SPDR STI ETF (SGX: ES3), an exchange-traded fund that mimics the fundamentals of the Straits Times Index, can serve as useful context when looking at the yields of the blue chips. As of 25 October 2017, the SPDR STI ETF was offering a yield of 2.99%.
Here are the five highest-yielding blue chips (figures as of 20 October 2017, unless otherwise stated):
- Hutchison Port Holdings Trust (SGX: NS8U) tops the list with a trailing distribution yield of 7.5%. But don't rejoice just yet. The container port owner and operator had cut its distribution per unit in 2015 by 16%. In 2016, the business trust further reduced its distribution by 11% year-on-year. To add to the pain, 2017's first half saw yet another 32% cut in distributions.
- Local telco StarHub Ltd (SGX: CC3) is offering the second highest yield at 6.7%, based on a trailing dividend per share of 18 cents. However, dividends are expected to fall as StarHub management has guided for dividends of 16 cents per share in 2017. Furthermore, StarHub recorded lower sales in its three out of its four business segments for the first half of 2017. Competitive pressure is also expected to rise when the fourth telco makes its debut in 2018.
- Ascendas Real Estate Investment Trust (SGX: A17U) takes third place with a distribution yield of 6.6%. For the financial year ending 31 March 2017 (FY16/17), the real estate investment trust's (REIT) distribution per unit (DPU) increased by 2.5% amid headwinds in the industry. On 20 October 2017, chief executive of the REIT manager Chia Nam Toon resigned for personal reasons.
- Another REIT, CapitaLand Commercial Trust (SGX: C61U) is offering a distribution yield of 5.6%, making it the fourth highest yield. In 2016, the commercial-based REIT increased its DPU to 9.08, up from 8.62 cents in 2015. For the first nine months of 2017, the adjusted DPU was increased 4.8% year on year. CapitaLand Commercial Trust continues to face a challenging commercial rental environment with market occupancy at a five-year low.
- Last but not least, CapitaLand Mall Trust (SGX: C38U) rounds out the list with a trailing DPU yield of 5.5%. The REIT's DPU slipped 1% from 2015 to 2016. For the first nine months of 2017, CapitaLand Mall Trust has been able to maintain its DPU. The REIT is in the process of redeveloping Funan Digitalife Mall amid a soft retail environment.
Of course, the highest dividend yield is not always the best dividend yield. As investors, we should be looking for companies that can sustain - or even better, grow! - their dividends over the long term.
Our team at Stock Advisor Singapore is particularly wild about not only high, but also highly sustainable dividend payers. Which is why Fool Singapore CEO and Stock Advisor Singapore Lead Advisor David Kuo recently put the finishing touches on a new 18-page special report that we believe will help any dividend-minded investor.
It's called "Separating the REIT From the Chaff," and you can download this report completely free of charge today!
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Disclosure: Chin Hui Leong owns CapitaLand Mall Trust. David Kuo owns CapitaLand Mall Trust. CapitaLand Mall Trust is a Stock Advisor Gold recommendation.