It’s always a joy to receive a dividend in your bank account.
Income-seeking investors relish the passive income stream that dividend-paying stocks provide.
Dividends not only fatten your bank balance but also represent a tangible return on your investment.
What’s even better is seeing these dividends increase over time.
Here is a list of three blue-chip companies that offer the best of both worlds – stability along with rising dividends.
Keppel Corporation Limited (SGX: BN4)
Keppel Corporation is a conglomerate with four divisions – energy and environment, urban development, connectivity, and asset management.
The group released its fiscal 2022’s first half (1H2022) earnings that saw revenue rise 16% year on year to S$3.3 billion.
Operating profit soared 71% year on year to S$355 million, and net profit jumped 66% year on year to S$498 million.
All of Keppel’s business divisions except for urban development saw a year on year rise in revenue.
In line with the better results, the board has recommended an interim dividend of S$0.15 per share, 25% higher than the S$0.12 paid out in 1H2021.
Coupled with last year’s final dividend of S$0.21, Keppel’s trailing 12-month dividend comes up to S$0.36, giving its shares a trailing dividend yield of 5.2%.
The conglomerate is advancing on its asset monetisation strategy, with over S$3.6 billion announced from October 2020 to July 2022, of which S$2.9 billion has been received in cash.
CEO Loh Chin Hua sounded an optimistic tone, reiterating that the group will focus on growing its recurring income through its myriad offerings in clean energy, decarbonisation, and sustainable urban renewal solutions.
These initiatives are in line with Keppel’s Vision 2030, unveiled more than two years ago, which seeks to create value for all stakeholders and keep the organisation asset light.
It is also targeting new areas of growth such as edge data centres, electric vehicle charging, and wave energy.
Wilmar International Limited (SGX: F34)
Wilmar is an integrated agribusiness group whose business model covers the entire agricultural commodity value chain.
The group cultivates, mills, processes, brands and distributes a wide range of edible food products and owns 500 manufacturing plants in some 50 countries and regions.
For 1H2022, Wilmar reported a 22.3% year on year rise in revenue to US$36.1 billion.
All three of the group’s divisions, namely Food Products, Feed and Industrial Products, and Plantation and Sugar Milling, saw year on year improvements in revenue.
Wilmar’s core net profit jumped 57.8% year on year to US$1.16 billion, with earnings per share growing by 55.8% year on year to US$0.185.
All three divisions saw year on year growth in profit before tax, with the Plantation and Sugar Milling segment seeing a more than a two-fold year on year rise to US$435.8 million.
The interim dividend per share was increased by 20% year on year from S$0.05 to S$0.06.
Together with last year’s final dividend of S$0.105, the trailing 12-month dividend stands at S$0.165, giving Wilmar’s shares a trailing dividend yield of 3.8%.
DBS Group (SGX: D05)
DBS needs no introduction, being Singapore’s largest bank with a market capitalisation of S$84 billion.
The lender reported a steady set of earnings for 1H2022, with net profit dipping by 3% year on year from the record high last year.
The bank raised its interim quarterly dividend by 9.1% year on year to S$0.36 per share, bringing the trailing 12-month dividend to S$1.41.
At DBS Group’s last traded share price of S$32.84, its shares offered a trailing 12-month dividend yield of 4.3%.
Meanwhile, the blue-chip lender has several catalysts going for its business.
Rising interest rates look set to raise DBS’ net interest margin (NIM), which in turn will improve its net interest income.
Already, the bank has reported that its July NIM stood above 1.8%, higher than the NIM of 1.58% recorded in the second quarter of 2022.
Also, back in January, the bank announced the acquisition of Citigroup’s (NYSE: C) Taiwan consumer business for S$2.2 billion, helping to accelerate its growth in the country by 10 years.
The higher net interest income and acquisition should boost DBS’ total income and earnings for the remainder of this year.
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Disclaimer: Royston Yang owns shares of DBS Group.