We all know that company stock is an ownership share of a company, and its value fluctuates based on how well it is doing. You may be rewarded for your investment if the company is doing well by receiving dividends. Dividends are payments made by a company to its shareholders. They are typically paid out at the end of an annual period.
The average annual dividend paid in Singapore is a valuable indicator of the health of the stock market. In 2018, it was $2.5 billion, a marginal decrease from 2017’s $2.6 billion. This year, the average annual dividend paid in Singapore can reach S $6,052. By 2026, experts believe it can reach S $6,510 following their 5% projected increase in the next few years.
If you’d love to earn extra on your investments through dividends, you’re reading the right post. Continue reading to learn more.
Everything You Should Know Before Investing in Dividend Stocks
Here are a few things you should know before you start investing in dividend stocks
1. Potential Growth or Opportunity Cost
With the stock market fluctuating daily, it is difficult to know which stocks to invest in. To choose the right stocks, it’s important to consider a few important factors like what the company does and how profitable they are. Most companies that issue growth stocks with dividends in the Singapore exchange are well-performing companies that give out dividends as incentives.
2. Risks Involved In Each Investment
Investing in Singapore dividend stocks is a sound strategy when you are looking for steady, long-term returns. However, there is always an inherent risk related to these investments. Dividend stocks have provided investors with these long-term, steady returns for decades. However, dividend stocks are not immune to market fluctuations. Therefore, we believe investors should know that investing in stocks with dividends doesn’t protect against losses.
3. Starting Capital
Before deciding to invest in Singapore Exchange markets, you should figure out how much you want to save before investing and receiving dividend yields. Your goal must be realistic and achievable, as well as considering the possibility of a worst-case scenario.
4. Dividend Dates or Stock Issuance Dates
Companies often issue stock dividends quarterly. They often distribute their total payment equally among all the outstanding shares. Dividends will give shareholders a cash flow that they can use to either purchase more shares or reinvest back into other assets. However, if the company is not doing well enough to increase its stock price, it might be better to take that cash and invest in other assets.
5. Dividend Amount Per Share
Dividends per share refer to the total number of dividends paid by a company over a given time divided by the total number of shares the company has issued. A company’s dividend per share is calculated using its previous dividend. It is also used as a basis for yield calculations.
Here are 10 of the best paying dividend stocks in Singapore.
Note: All percentages we’ve listed are trailing dividend yields unless we indicated it otherwise.
|CK Hutchison Holdings||5.35%||4.27%||3.91%||2.73%||2.59%|
|Maple Tree North Asia Commercial Trust||5.61%||7.13%||6.95%||n/a||n/a|
|Singapore Exchange Ltd||2.46%||2.53%||2.15%||1.30%||4.18%|
|Dairy Farm International Holdings Ltd||4.68%||3.72%||2.33%||2.68%||2.82%|
|DBS Group Holdings Ltd||4.90%||4.62%||5.20%||1.18%||3.60%|
|Hotel Properties Limited||S $0.08 (per share)||S $0.04 (per share)||S $0.04 (per share)||S $0.04 (per share)||S $0.04 (per share)|
|Micro-Mechanics||S $0.11 (per share)||S $0.10 (per share)||S $0.09 (per share)||S $0.08 (per share)||S $0.05 (per share)|
|Powermatic Data Systems||S $0.08 (per share)||S $0.05 (per share)||S $0.05 (per share)||S $0.05 (per share)||S $0.05 (per share)|
Learn more about each of these dividend stocks.
1. CK Hutchison Holdings
This port operating company can make long-term profits while supporting and profiting from global trade. The company has 53 ports that serve 27 countries. However, it’s unlikely that Hutchison Port Holding Trust will do as well as a tech stock. But still, CK Hutchison Holdings has a strong position in an established market, and any disruptors face high barriers to entry.
2. StarHub Ltd
StarHub trimmed their dividend in 2020 and 2019. Their annual yield has been increasing by 15% within the last 10 years. However, StarHub is a small telecom company with falling costs and low prices. It’s a good idea for long-term investors to get in now while they can.
3. Maple Tree North Asia Commercial Trust
The price chart of Maple Tree North Asia Commercial Trust has fluctuated between 63-1.48 since 2013. The Singapore-based Industrial REIT is currently about the middle of its target range. The company takes on commercial property investments in China and Japan to provide long-term consistent returns.
4. ST Engineering
ST Engineering operates in the aerospace, electronics & marine sectors. The company has a market cap. of S $12.4 billion and 23,000 employees based out of Singapore. While the dividend level might not be huge, it is very consistent, which is important. If you’re looking for a Singapore-based company with a high dividend yield and want to park your money to one side for now, then ST Engineering is a reliable company.
5. Singapore Exchange Ltd
SGX, the company that owns the Singapore Stock Exchange, has seen its profits soar due to the booming financial services industry and people investing in stocks. They offer a healthy dividend yield and share price growth. Doing this makes them appear to be a high-reward, low-risk investment.
6. Dairy Farm International Holdings Ltd
Dairy Farm is well-known for their 10,000 outlets and 220,000 staff. They sell under several brands, including Cold Storage, Manning’s and Maxim’s. It seems like their total earnings will exceed $28 billion in 2020. They have a high dividend yield and low share prices, so it might be a good time to buy now.
7. DBS Group Holdings Ltd
This financial company is headquartered in Singapore, but they do business globally. It’s a big deal that the bank is ranked as the highest in Asia, meaning you get guaranteed earnings. It has a strong balance paper and is looking to invest. It’s in good shape for upcoming growth and with steady income stream. DBS is Singapore’s largest bank and they announced a net profit of S $2billion during the first quarter 2021. Quarterly results are better than they’ve been in a while, thanks to improved bad loan ratios.
8. Hotel Properties Limited
Hotel Properties Ltd. invests in hotels, runs them and develops more properties. The hotel aspect is segmented into the operations (managing reservations and rooms) and the properties (rental and sale units). The Other category includes Hotel Properties Ltd.’s business segments, such as distribution and retail and investments
Micro-Mechanics is an industry leader and provides high-quality tools for various industries, including semiconductor, medical, and aerospace manufacturing. They are known for their wire cutter blades, rubber tips and large wire equipment. Micro-Mechanics will likely see exponential growth and excellent dividend payout in the coming years because of expert’s projects on their respective industries’ growths making it a promising addition to your investment portfolios.
10. Powermatic Data Systems
Powermatic Data Systems Ltd. is a company that designs & manufactures wireless devices and provides wireless solutions, among other things. It’s involved in the wireless connectivity products manufacturing industry and freehold investment property. Their wireless connectivity product operations involve the manufacture, marketing, and distribution of said products.
How Do You Evaluate Singapore Dividend Stocks?
If you’re looking into Singapore stock dividends, the first thing to know is how to calculate their dividend yield. You can calculate yield by dividing annual dividends per share price by the stock price. Then, you simply divide the amount of dividends paid out in cash terms in a given year per share by the share price.
Brokers: An Essential Part of Your Investment Journey
Finding a high-yield stock investment is always the first step, but selecting the right broker is just as important. You’ll be depositing money into a new account, so it’s also smart to research a safe broker before you start trading. If you’re looking for a great broker, we recommend the following to speed up your ROI.
|Broker||Number of Shares||Shares||Available Markets|
|Interactive Brokers||Access to global markets||Yes||Global markets|
|Saxo Markets||19,000+||Yes||Global markets|
|Plus500||2,000+||No||US, UK, AU, DE, FR, IT, PT, GR, JP, SG, ZA, NL, FI, BE, DK, SE, CH, ES, AT, NO, HU, CZ, IE, PL, HK|
|BlackBull Markets||N/A||No||UK, HK, JP, MY, NZ, US|
|Libertex||50+||No||Worldwide with exception.|
Should You Always Aim For High Dividend Yield?
The dividend yield is just one of many metrics you should consider when investing in a company’s stock. No company can guarantee their dividend issuance, and they can change the dividend amount or entirely remove it. So, while it’s nice to know you can earn from them, don’t put too much of your focus on the dividend yield alone.
Why Are Dividend Stocks Worth Investing In?
Investors are always looking for high-growth companies with solid dividends to buy into. Companies that pay out dividends are seen as more stable and predictable than their counterparts that need to reinvest their earnings back into the company to grow.
The best time for you to invest in dividends is when you’re looking for stability and predictability from your investment choice. Investment stability and predictability are important because they give investors security and stability, which are crucial for any investment venture. Additionally, you could also aim to buy undervalued stocks for its worth.
What is the difference between a dividend and a stock split?
A stock dividend is an additional share of stock that a company distributes to each shareholder. The company pays for the dividend by splitting the shares of its stock and giving one additional share for each share held.
A stock split is a company’s decision to reduce its outstanding shares to make them more affordable and accessible, thereby increasing demand.
Are There Other Ways That Dividend Stocks Affect Companies?
Some people may think that the only purpose of a company is to make money for its shareholders. However, this is not the case.
For example, some companies use their profits to buy back their stock shares to reduce the number of shares available and increase the share price. Another reason why a company might not pay dividends is that they need those funds to expand into new markets or grow their business.
Why Buy Dividend Stocks Over Conventional Shares?
Dividends are paid out periodically so you can receive regular income from your investments. Plus, dividend stocks typically have lower volatility than non-dividend-paying shares because they provide an income stream irrespective of market conditions.
Why Does Warren Buffett Dislike Dividend Stocks?
Buffett said that he does not like to buy stocks that pay dividends because he believes that stock prices should be determined by an investor’s estimation of a company’s future profits and not how much money they’ve made in the past.
The traditional metric for determining the value of a stock is based on how much profit a company has made in the past. But, price-to-earnings ratio methods are becoming increasingly inaccurate. Buffet believes that investors should be able to determine a stock’s worth by estimating future profits instead.
Are All Stock Brokers Capable of Providing Dividend Stocks?
Not all stockbrokers can provide dividend-paying stocks, and not all stockbrokers are good for your portfolio.
When you purchase stocks in a company, you can expect to get dividends from them. These dividends provide an extra return on your investment and can be a great way to build up your wealth if you invest wisely. If you are going to buy a dividend stock, the broker must be reliable and reputable. You should ask them about their policies regarding dividends so that they match well with what you want as an investor.
Does Singapore Stock Market Investing Research Take Too Much Time?
It is estimated that an individual investor can spend up to 10 hours a week researching dividend-paying stocks. If this is too much for you, consider that the average time spent by a market analyst in stock research is roughly nine hours per day. Thus, you’re spending an extra hour for possibly higher returns.
What’s a Wise Way to Mitigate Market Risks?
An investment plan might include creating a portfolio of stocks, bonds, or other securities. It could also include opening up an investment account with a bank or brokerage firm. Setting up an account will provide access to a variety of investment opportunities and will usually come with the help of a financial advisor. These advisors can help by providing advice on the best ways for someone’s needs and risk tolerance level to invest their money to make it grow over time.
Investing requires setting up goals and sticking to them for the long term. Investors who are disciplined about their finances will have more consistently successful results.
To Sum It All Up
- Dividend stocks function like shares, but companies pay investors dividend amounts to incentivize them to invest with them once again.
- Dividend stocks cost just like normal shares but pay you dividends on a regular schedule.
- Like all stock market ventures, you’ll need to use a broker to purchase dividend stocks.
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