The Top 11 Quality Dividend Stocks from the Singapore Stock Market
Two weeks ago, Singapore Exchange Limited (SGX: S68) launched the SGX Developed Asia ex Japan Quality Index.
The new index is a regional index built on what are considered to be “quality factors.” In the accompanying report for the launch of the index, SGX outlined its selection criteria, which includes financial metrics such as the net profit margin, the return on equity and invested capital, and the level of financial leverage and accrued income.
In all, the index has 60 companies with 21 listed companies from Singapore making the cut. Of the 21 companies, 12 were component stocks of the Straits Times Index (SGX: ^STI).
From there, I picked out the eleven companies with the highest dividend yields so that we have a taste of what the quality index holds (figures as of 14 April 2017 unless otherwise stated). For first six companies, head here. The rest are found below:
1. ComfortDelGro Corporation Ltd (SGX: C52) is in the list at sixth place with a trailing dividend yield of 4%. The land transport provider has a market cap of around $5.7 billion and its shares have delivered a total annual return of 15.2% over the last five years. In 2016, ComfortDelGro increased its dividend by 14% to 10.3 cents.
2. Meanwhile, Sheng Siong Group Ltd (SGX: OV8) sports a dividend yield of 3.8% and is in seventh place. Over the last five years, Sheng Siong’s shares have delivered a total return of 20.7% per year. The supermarket owner and operator has a market cap of just under $1.5 billion. In 2016, Sheng Siong grew its dividend by 7.1% from 3.5 cents per share to 3.75 cents.
3. Tied for eighth place is Oversea-Chinese Banking Corp Ltd (SGX: O39) with a trailing dividend yield of 3.7%. The Singapore-based bank has a market cap of $40.5 billion and has delivered a total return of 6.1% per year over the past five years. OCBC’s dividend was unchanged in 2016 at 36 cents per share.
4. Also in eighth place is Singapore’s bourse operator SGX. Like OCBC, SGX offers a dividend yield of 3.7%. It has also delivered a total return of 6.3% annually over the last five years. SGX’s dividend was unchanged in 2016 (at 28 cents per share) when compared to 2015.
5. In ninth place is airline services provider SATS Ltd (SGX:S58). The firm offers a 3.3% dividend yield. SATS weighs in at a little over $5.4 billion in market cap. The company, whose dividend in its last completed fiscal year was 15 cents per share, up 7.1% from a year ago, has delivered a total annual return of 19.3% over the last five years.
There is usually a good reason why companies are offering higher yields. As investors, it is our duty to find out the possible reasons and decide whether the concerns are valid or not.