Investing in dividend stocks can be a lucrative strategy for generating passive income. Singapore, known for its robust financial market, offers several opportunities for dividend investors. In this article, we will explore the top five highest dividend stocks in Singapore for 2024 and provide a comprehensive guide on how to choose and trade dividend stocks effectively.
I wrote this article in 2023, but have updated the data for 2024.
How to Choose the Best Dividend Stocks in Singapore
Before investing in any dividend stocks, you will have to look at vital financial data of the company in order to be able to find right stocks to invest in Singapore. Factors like long-term profitability, debt-to-equity ratio, and dividend dates can serve as valuable information that will give you a better idea of whether you should invest in a particular stock. These data can be found on financial websites such as https://sg.finance.yahoo.com/, which provides detailed financial data on each stock.
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Long-Term Profitability
To identify the best dividend stocks in Singapore, it is crucial to assess their long-term profitability. Look for companies with a consistent track record of generating profits and increasing their dividends over time. Such companies demonstrate their ability to sustain or even increase dividend payments even during challenging economic conditions.
Debt-to-Equity Ratio
Another important factor to consider is the debt-to-equity ratio of a company. A low debt-to-equity ratio of under 1.0 indicates a healthier financial position, making it more likely for the company to continue paying dividends consistently. Look for stocks with a favourable ratio to minimize the risk of dividend cuts.
Dividend Dates
Understanding the dividend dates is essential for dividend investors. Pay attention to the ex-dividend date, which determines if you are eligible for the upcoming dividend payment. Additionally, consider the dividend yield, which is the annual dividend payment as a percentage of the stock's current price. A higher dividend yield (greater than 4%) indicates a potentially attractive investment opportunity.
Economic Trends
Analysing economic trends is crucial when selecting dividend stocks. Consider industries that are resilient to economic downturns and have the potential for growth. Look at the current market conditions, government policies, and industry outlook to make informed investment decisions.
Top 5 High Dividend Stocks in Singapore for 2024
On top of an excellent track record of having high dividend rates, these companies are leaders of their respective industries with strong growth potential:
- DBS Group Holdings Ltd.
- Singapore Telecommunications Limited (Singtel)
- Singapore Exchange Limited (SGX)
- CapitaLand Limited
- Keppel Corporation Limited
1. DBS Group Holdings Ltd. | D05.SI
DBS Group Holdings Ltd. is a multinational bank and financial services corporation that is headquartered in Singapore. Over the past few years, DBS has demonstrated its commitment to rewarding investors through regular and growing dividend payments. For example, in 2020, despite the challenging economic conditions brought about by the COVID-19 pandemic, DBS maintained its dividend payout, reflecting the bank's resilience and strong financial position.
In 2023, DBS announced a dividend of SGD 0.42 per share. This payout reflected the bank's confidence in its performance and ability to generate sustainable earnings. Furthermore, in recent years, DBS has increased its dividend per share, showcasing its commitment to delivering value to shareholders. This also represents a dividend yield of 4.64% based on DBS's closing share price of SGD 31.63 on May 26, 2023.
The consistent and growing dividend payments from DBS Group Holdings highlight the company's ability to generate strong cash flows and its commitment to shareholder-friendly policies. Investors who prioritize dividend income can find stability and potential long-term growth in DBS, benefiting from the bank's solid financial performance and its status as one of the leading banks in Southeast Asia.
2. Singapore Telecommunications Limited (Singtel) | Z74.SI
Singtel is a leader in the telecommunications space with a significant presence across the Asia-Pacific region. Singtel has a history of providing consistent dividends to its shareholders over the past few years. The company's commitment to returning value to investors is evident through its regular dividend payments. Singtel has maintained a stable dividend policy across the past few years, ensuring reliable income for shareholders.
For example, in 2023, Singtel declared a final dividend of SGD 0.053 per share. This brings the total dividend for the year to SGD 0.149 per share. This represented a dividend yield of approximately 5.8% based on the stock price at that time.
Singtel's ability to generate consistent cash flows from its core telecommunications business, coupled with its strategic expansion into new areas such as digital services and data centres, supports its ability to sustain dividend payments. By diversifying its revenue streams and adapting to changing market trends, Singtel aims to maintain its position as a reliable dividend stock for investors.
3. Singapore Exchange Limited (SGX) | S68.SI
Singapore Exchange Limited (SGX) is the primary securities exchange in Singapore, and is among the top stock exchanges in Asia. SGX has a strong track record of providing strong dividends. As the main stock exchange in Singapore, SGX benefits from its pivotal role in facilitating capital market activities in the country. The company's stable revenue streams, derived from various sources such as listing fees, trading activities, and market data services, contribute to its ability to sustain dividend payments. In recent years, SGX has displayed its ability to deliver value to shareholders through regular dividend distributions.
For instance, in 2023, SGX declared a total dividend of SGD 0.16 per share (SGD 0.08 twice in that year). This was despite the challenges posed by the global pandemic. This represented a dividend yield of approximately 1.72% based on the average stock price for the year (SGD 9.29).
SGX is able to consistently generate revenue and maintain its strong market position in Asia. Furthermore, its regulatory advantages as the main stock exchange in Singapore contribute to its ability to sustain dividend payments. Additionally, with the potential for increased trading activity, the listing of new companies and ongoing efforts to enhance market liquidity presents an appealing opportunity for dividend investors seeking exposure to the Singapore stock market.
4. CapitaLand Limited | 9CI.SI
CapitaLand Limited is a leading real estate group headquartered in Singapore. They operate globally and have holdings across various real estate sectors such as residential, commercial, industrial, and retail developments. CapitaLand Limited is another excellent stock that offers attractive dividend rates across the past few years. Their commitment to returning value to investors is reflected in its regular dividend payments. CapitaLand's ability to generate steady rental income from its diversified portfolio of properties contributes to its sustainable dividend payouts.
Over the last few years, CapitaLand has maintained a consistent dividend policy, which has helped to generate a stable stream of income for investors.
For example, in 2023, CapitaLand declared a dividend of SGD 0.12 per share. This represented a dividend yield of approximately 3.5% based on the stock price of SGD 3.45 as of May 26, 2023.
CapitaLand's strategic focus on quality properties, its strong market presence, and its proactive portfolio management contribute to its ability to sustain dividend payments. By actively managing its assets and capital allocation, CapitaLand aims to maximize returns for its shareholders while maintaining a prudent financial position. These factors, along with its established reputation and track record, position CapitaLand as a reliable dividend stock in Singapore's real estate sector.
5. Keppel Corporation Limited | BN4.SI
Keppel Corporation Limited is a Singaporean conglomerate that has been heavily involved in marine and offshore operations. Additionally, they have significant investments in local infrastructure. Keppel Corporation Limited has a history of providing consistent dividends to its shareholders over the past few years. The company's commitment to delivering value to investors is evident through its regular dividend payments. Keppel Corporation's diversified business segments, including offshore and marine, property, and infrastructure, contribute to its ability to generate stable cash flows and sustain dividend payouts.
In the past few years, Keppel Corporation has maintained a stable dividend policy, which illustrates its dedication to rewarding investors.
For example, in 2022, Keppel Corporation declared a final dividend of SGD 0.15 per share. In 2023, Keppel Corporation declared a dividend of SGD 0.18 for the year. The increase in dividend rate boosted investor confidence and signifies that the company’s financial health remains strong. This also represented a dividend yield of approximately 5.08% based on the stock price at that time.
Keppel Corporation's ability to adapt to market trends and its focus on sustainable growth contribute to its resilience and potential for future dividend stability. The company actively pursues opportunities in emerging sectors, such as renewable energy and sustainable solutions, which positions it well for long-term growth. Keppel Corporation's track record of delivering value to shareholders, coupled with its commitment to innovation and strategic investments, makes it an attractive dividend stock in Singapore's diversified conglomerate sector.
Stock Comparison
Source: www.morningstar.com
To make projections for future years, you need to know data for at least the last 5-7 years. In the table below you will find this data for each of the companies:
Source: www.morningstar.com
How to Invest in Dividend Stocks in Singapore?
Here is how you can start investing in dividend stocks in Singapore:
Select a Broker. Begin by selecting a reputable brokerage firm that offers competitive fees, a user-friendly trading platform, and access to a wide range of dividend stocks listed on the Singapore Exchange (SGX). Some popular choices include Tiger Brokers, moomoo SG, and Interactive Brokers.
Open and Fund Account. Once you've chosen a brokerage, proceed to open an account by providing the necessary information and completing the registration process. Afterward, ensure that you deposit sufficient funds into your account to cover your intended investments in dividend stocks.
Research Companies. Before making any investment decisions, it's crucial to conduct thorough research on the companies you're interested in. Utilize both technical and fundamental analysis to assess their financial health, market position, and growth prospects. This comprehensive analysis will help you make informed investment choices.
Select and Buy Stocks. Once you've conducted thorough research and analysis of the dividend stocks available in the Singapore market, it's time to select the stocks that align with your investment goals and risk tolerance. Consider factors such as the company's financial health, dividend history, growth prospects, and industry trends to make informed decisions. Then, execute your chosen trades by buying the selected stocks through your brokerage account. Ensure that you follow the necessary steps provided by your chosen brokerage platform, such as entering the correct stock symbol, specifying the desired quantity, and setting the appropriate order type (e.g., market order or limit order).
Timing and Averaging. Timing is crucial when investing in dividend stocks. Analyze market trends to identify favorable entry points that can maximize your returns. You can also consider a dollar-cost averaging strategy by investing a fixed amount regularly. This approach allows you to average your purchases over time, insulating you from market downturns while benefiting from long-term capital growth.
Trade Wisely. Invest an amount you can afford to lose, diversify your portfolio, and stay informed about market developments for effective dividend stock trading in Singapore.
Conclusion
All in all, investing in dividend stocks in Singapore requires careful analysis, research, and risk management. This will not only allow you to find good stocks to invest in Singapore, but also allow you to identify stocks that can generate high returns for you in the long term. By following the guidelines outlined in this article and staying informed about market developments, investors can build a portfolio of high-quality dividend stocks that provide reliable income and the potential for long-term growth.
No time to pick the best dividend stocks? Kilde offers returns of up to 13.5%* per annum by providing investors with access to investments in private debt. Investor funds are professionally managed by their analysts who are consistently seeking ways to generate greater returns on your investment.
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Also you may read:
CPF Investment Scheme (CPFIS) - How To Use it To Generate High Income
Best Investment options in Singapore
Sources of information for Top 5 Dividend Stocks in Singapore
1. https://sginvestors.io/sgx/stock/bn4-keppel-corp/corporate-action
2. https://sginvestors.io/sgx/stock/9ci-capitalandinvest/share-price-history
3. https://sginvestors.io/sgx/stock/9ci-capitalandinvest/corporate-action
4. https://sginvestors.io/sgx/stock/s68-sgx/share-price-history
5. https://sg.finance.yahoo.com
6. https://sginvestors.io/sgx/stock/d05-dbs/corporate-action
Aleksandra Yurchenko does not hold any positions in these stocks, nor does she receive any form of compensation for writing about them. This article is for informational purposes only and should not be construed as investment advice. Always consult with a qualified financial advisor before making any investment decisions.
*KILDE PTE LTD (“Kilde”) is incorporated in Singapore (registration no. 201929587K) is licenced and regulated by the Monetary Authority Singapore and holds a Capital Markets Services Licence (CMS101016) and an Exempted Financial Advisor License under the Financial Adviser Act. The information provided in this marketing material is intended for “accredited investors” and “institutional investors” (collectively “qualified persons”) only. This marketing material, and any information in this marketing material, or any documentation that Kilde provides in relation to this marketing material is provided without any representation or any kind of warranties whatsoever (whether express or implied by law).
This advertisement has not been reviewed by the Monetary Authority of Singapore.
