The investment world is often broadly divided into two categories — growth and income.
Growth investors seek fast-growing companies that reinvest their cash flows.
Such stocks usually do not pay a dividend, but offer the potential for impressive share price gains if their profits climb rapidly.
On the flip side, income investors prefer the stability of dividends as a source of passive income.
Stocks that pay out a consistent and regular dividend satisfy this group of investors.
But what if there are stocks that do both, offering a healthy mix of growth and dividends?
That would be getting the best of both worlds.
What’s more, it’s even better if these dividends are paid out every three months.
Here are three Singapore companies that fulfil these criteria.
DBS Group (SGX: D05)
DBS is the largest of the three local banks in Singapore.
The lender has demonstrated resilience over the last two years even as economies buckled under the weight of the pandemic.
DBS reported a record net profit of S$6.8 billion for its fiscal year 2021 (FY2021) as it deftly navigated the challenges by growing its loan book and registering higher fee income.
At the same time, the group increased its quarterly dividend to S$0.36 per share, up from S$0.33 in the previous quarter.
Annualised dividend now stands at S$1.44, giving its shares a forward dividend yield of around 4%.
Aside from this healthy yield, the bank is also targeting to continue its growth momentum.
It recently acquired the Taiwan consumer banking division of Citigroup (NYSE: C) in a S$2.2 billion transaction.
And with interest rates poised to rise in the coming months, DBS should also enjoy higher net interest income.
iFAST Corporation Limited (SGX: AIY)
iFAST is a financial technology company that runs a platform for the buying and selling of securities such as unit trusts, equities, and bonds.
The group has reported healthy growth over the last year as it enjoyed an influx of client funds, pushing its assets under administration to a record S$19 billion as of 31 December 2021, up 31.5% year on year.
Revenue for FY2021 climbed 27.2% year on year to S$216.2 million while net profit surged by 44.8% year on year to S$30.6 million.
In line with the strong results, iFAST will pay out a total dividend of S$0.048 for FY2021, 45.5% above the S$0.033 it paid out the year before.
Shares of iFAST are yielding around 0.8%.
The fintech company has ambitious growth plans that were revealed in its five-year plan last year.
It wants to fast-track growth at its Hong Kong division after clinching a significant contract to revamp the country’s pension system.
Another goal was to pursue more licences in the region to enable it to grow its AUA further.
In line with this objective, iFAST purchased a UK digital bank, BFC Bank, back in January for around S$73.4 million.
Should the group see its net profit climb in the future, investors can enjoy rising dividends in tandem.
UMS Holdings Limited (SGX: 558)
UMS provides a one-stop-shop for equipment manufacturing and engineering services to original equipment manufacturers (OEM) of semiconductor and related products.
The group has reported a strong performance for FY2021, driven by the sustained demand for microchips and increasing capital spending by semiconductor fabs worldwide.
Revenue shot up 65% year on year to S$271.2 million while net profit jumped 46% year on year to S$53.1 million.
UMS has doubled its final dividend to S$0.02 in line with this stellar performance.
Previously, the group has paid out an interim dividend of S$0.01 each for its first two quarters.
A one-for-four bonus issue followed, and UMS also paid out a S$0.01 dividend for its third quarter.
In total, the FY2021 dividend came up to S$0.0575 after accounting for the bonus issue, translating to a trailing dividend yield of 4.8%.
UMS chairman and CEO Andy Luong believes that the group can continue its good performance.
Its key customer has provided positive guidance for this year and the World Semiconductor Trade Statistics has also projected that the global semiconductor market will grow by 8.8% in 2022 to US$601 billion.
The wafer fab equipment segment is projected to expand by 43.8% to a new record of US$88 billion last year, followed by another 12.4% increase this year.
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Disclaimer: Royston Yang owns shares of DBS Group and iFAST Corporation Limited.
