It’s always a joy to receive a dividend.
Income-seeking investors will relish this stream of passive income that helps to put money directly in their pockets.
The great news is that many Singapore-listed stocks pay out a consistent dividend.
By owning a portfolio of dividend-paying stocks, you can generate a steady stream of cash into your bank account.
Blue-chip stocks are known for their resilience and all of them pay out a dividend.
REITs are another asset class that dishes out dependable distributions as they need to pay out at least 90% of their profits to enjoy tax benefits.
We throw the spotlight on three companies and REITs that are paying out their dividends this month.
Along the way, we will also provide a brief review of their latest earnings.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The group released its fiscal 2023’s first half (1H FY2023) earnings ending 31 December 2022 yesterday.
SGX reported revenue of S$571 million, up 9.6% year on year, while operating profit rose 9.5% year on year to S$284 million.
Net profit surged by 30% year on year to S$284.6 million due to one-off and non-recurring items.
If these items are excluded, SGX would still see a 7% year on year rise in net profit to S$237 million.
The group generated a free cash flow of S$163.1 million for the half-year, down 32.2% year on year from 1H FY2022’s S$240.4 million.
The bourse operator declared an interim dividend of S$0.08, bringing 1H FY2023’s dividend to S$0.16.
The latest dividend will be paid out on 24 February.
SGX’s multi-asset platform continues to be a popular choice for its clients as daily average volume (ADV) rose 10% year on year to more than one million contracts in 1H FY2023.
All three key areas of equities, foreign exchange and commodities saw year on year increases in the number of contracts traded.
Its over-the-counter foreign exchange business contributed just 6% of the group’s revenue but is on track to achieve an ADV of US$100 billion soon.
SGX’s future looks bright with the upcoming commencement of full-scale operations of the National Stock Exchange of India IFSC-SGX Connect as well as the reopening of China’s borders.
Suntec REIT (SGX: T82U)
Suntec REIT is a retail cum commercial REIT with a portfolio of 10 properties spread out across Singapore, Australia, and the UK.
Assets under management stood at S$12.3 billion as of 31 December 2022.
The REIT reported a commendable set of earnings for fiscal 2022 (FY2022).
Gross revenue jumped 19.3% year on year to S$427.3 million while net property income surged by 24% year on year to S$315.8 million.
The better performance came from higher contributions from its Suntec City asset along with better revenue from the Minster Building in the UK.
Suntec REIT’s distribution per unit (DPU) came in at S$0.08884 for FY2022, up 2.5% year on year.
For the fourth quarter of 2022, the REIT will pay out a DPU of S$0.0199 and unitholders will receive this distribution on 28 February.
The REIT manager remains cautious about its 2023 outlook as it anticipates a slowdown in demand for office spaces in Singapore and a slight increase in vacancies in Australia’s office sector.
Meanwhile, higher occupancy and the return of tourists should benefit Suntec City Mall’s revenue performance.
Micro-Mechanics (Holdings) Ltd (SGX: 5DD)
Micro-Mechanics (Holdings), or MMH, designs and manufactures high-precision tools used in the fabrication and assembly processes of the semiconductor industry.
The group posted a 9.6% year on year fall in revenue to S$36.9 million for 1H FY2023.
Operating profit declined by 34% year on year to S$8.4 million while net profit plunged by 35.5% year on year to S$6.1 million.
Despite the weaker results, MMH still generated a healthy free cash flow of S$9.8 million for the half-year.
The group also maintained its interim dividend of S$0.06 which will be paid out on 17 February.
Looking ahead, the semiconductor industry is poised to face headwinds.
Global semiconductor sales saw their first year on year decline since January 2020 in September 2022.
Elsewhere, the World Semiconductor Trade Statistics (WSTS) has also revised its sales forecast for the semiconductor market to grow by just 4.4% year on year this year.
WSTS also foresees a 4.1% year on year decline in semiconductor sales for 2023.
Hence, MMH could face more headwinds in the near term that may negatively impact its revenue and net profit.
Want to know what to expect in the stock market in 2023? Which were the best performing stocks and blue chips in the Singapore market in 2022? Be prepared for 2023 with our special FREE report. Click HERE to download “Year in Review 2022”
Disclosure: Royston Yang owns shares of Singapore Exchange Limited, Suntec REIT and Micro-Mechanics (Holdings).