Singapore’s Highest Yielding Blue Chips

·3-min read
Dividend Yield
Dividend Yield

Singapore’s stock market barometer, the Straits Times Index (SGX: ^STI), closed yesterday at 3,201.86 points. 

Based on data for the STI-tracker, the SPDR Straits Times Index ETF (SGX: ES3), the index has a trailing dividend yield of around 2.6% at that level.

But while the “average” yield among the blue chips does not exactly send pulses racing, there are more than a handful of shares within the STI that have attractive yields above 4%.

At the moment, the three higher-yielding shares within the index include DBS Group (SGX: D05), Frasers Logistics & Commercial Trust (SGX: BUOU), and Hongkong Land Holdings Limited (SGX: H78).

Let’s take a closer look at each of these names.

DBS Group

Singapore’s largest lender offers a comprehensive range of banking services to individuals and corporations.

The bank was able to restore its dividends to pre-pandemic levels when the Monetary Authority of Singapore lifted dividend restrictions that were in place since June last year.

DBS declared a quarterly dividend of S$0.33 for its latest quarter, bringing full-year annualised dividend to S$1.32.

At the current share price of S$31.49, the forward dividend yield for the bank stands at 4.2%.

Frasers Logistics & Commercial Trust

Frasers Logistics & Commercial Trust, or FLCT, is the sixth-largest Singapore REIT with a portfolio of 103 properties worth S$6.8 billion as of 30 June 2021.

For its fiscal 2021 first half (1H2021) ended 31 March 2021, the REIT declared a distribution per unit (DPU) of S$0.038, up 9.5% year on year.

Annualised DPU stands at S$0.076, translating to a forward distribution yield of 5.1% for the REIT.

FLCT is set to release its fiscal full-year 2021 earnings on the morning of 11 November.

Hongkong Land Holdings Limited

Hongkong Land, or HKL, is a property investment, management and development group that owns and manages more than 850,000 square metres of prime office and luxury retail property in Asian cities such as Singapore, Hong Kong, and China.

The group’s trailing 12-month dividend stood constant at US$0.22 despite reporting a challenging environment and significant uncertainty.

At a share price of US$5.16, the trailing dividend yield stands at 4.2%.

Get Smart: Keep an eye on the business

While these dividend yields undoubtedly seem attractive, investors need to remember to keep a close watch on the business.

If the business performs well, then these three companies should be able to sustain or even improve their dividend payments.

But if the business suffers from a decline in profits and cash flows, it may reduce its dividend in future years to conserve cash.

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Disclaimer: Royston Yang owns shares in DBS Group and Frasers Logistics & Commercial Trust.

The post Singapore’s Highest Yielding Blue Chips appeared first on The Smart Investor.

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