The sandwich generation is an increasingly popular term used to define working adults who are caught in between caring for both their children and their elderly parents.
Taking care of your children is not new.
However, the cost of living has outpaced what many of the senior folk had originally planned for their retirement, leading to financial reliance on their children.
Investors who find themselves “sandwiched” need to focus not just on obtaining a regular flow of passive income.
There is also the need to grow their investments to beat inflation and build their nest egg for retirement.
Hence, it makes sense for this group of investors to select companies that offer both long-term growth and dividends.
Here are three promising dividend stocks that are appropriate for the sandwich generation.
iFAST Corporation Limited (SGX: AIY)
iFAST is a financial technology company that operates a platform for the buying and selling of unit trusts, equities and bonds.
The group has been steadily building up its assets under administration (AUA) over the years, and the AUA provides a good indication of iFAST’s top line.
Just three years ago, iFAST’s AUA stood at S$8.33 billion, but this has since more than doubled to S$17.5 billion as of 30 June 2021.
For its fiscal 2021 first half (1H2021), the group chalked up a 41.4% year on year rise in net revenue while its operating profit jumped by 86.4% year on year to S$18.7 million.
Not only has profit increased significantly in the last three years, but dividends have also risen in tandem.
For 1H2021, the total dividend stood at S$0.021, more than the S$0.015 paid out in the prior years.
The group is seeing healthy net inflows that should lead to ever-increasing AUA.
Barring a sharp drawdown in the markets, iFAST should enjoy increasing revenue and net profit over time, enabling the group to continue upping its dividends.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange.
It operates a platform for the buying and selling of securities such as equities, fixed income and derivatives.
The bourse operator is a great example of a business whose revenue and profits are growing and which also pays an increasing dividend.
For the group’s 1H2021 ended 31 December 2020, revenue was up 9% year on year to S$521 million while net profit climbed by 12% year on year to S$240 million.
The quarterly dividend was raised from S$0.075 to S$0.08.
SGX has engaged in a three-prong growth approach — through acquisitions, new products and partnerships.
The group recently announced the acquisition of MaxxTrader for US$125 million to expand into the foreign exchange over-the-counter market for sell-side clients.
In the last few months, the exchange also launched new futures contracts for liquified natural gas vessels and the world’s first ESG REIT derivatives.
A third method that SGX is using to grow is to collaborate with partners.
Two such examples include a partnership with Platts, a unit of S&P Global Inc (NYSE: SPGI), to provide commodities content and data; as well as working with CNBC, the world’s number one business and financial news network, to create indices focused on growth economies and sectors.
Raffles Medical Group Ltd (SGX: BSL)
Raffles Medical Group, or RMG, is an integrated private healthcare provider that operates three tertiary hospitals and more than 100 multi-disciplinary clinics.
The group’s flagship Raffles Hospital offers a comprehensive range of tertiary care services, employing more than 2,700 employees.
RMG managed to pivot to help the government tackle the COVID-19 pandemic, even as it suffered from a fall in elective procedures as borders remained shut.
For 1H2021, the group reported a 42.4% rise in revenue to S$343.8 million while operating profit more than doubled year on year to S$56.1 million.
Net profit surged by 128.7% year on year to S$39.4 million.
RMG plans to consolidate its interim and final dividends into a single dividend paid after it releases its year-end results, and has committed to paying no less than S$0.025, similar to what was paid out last year.
Investors can look forward to additional contributions flowing in from the newly-opened Raffles Hospital Shanghai, a 12-storey, 400-bed hospital offering a comprehensive suite of medical services.
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Disclaimer: Royston Yang owns shares of iFAST Corporation Limited, Singapore Exchange Limited and Raffles Medical Group Ltd.
