Dividends are a great form of passive income.
Not only can they help to supplement your earned income, but they also represent a tangible return on your investment.
The good news is that many profitable companies pay out a dividend to reward their shareholders.
However, of late, the twin headwinds of high inflation and surging interest rates have dented profits and cash flows for a wide swath of businesses.
Yet, there is a small group of companies that defied the odds to not only post better results but have also significantly raised their dividend payments.
We showcase three such stocks that have hiked their dividends by 50% or more.
Genting Singapore (SGX: G09)
Genting Singapore owns the Resorts World Sentosa (RWS) integrated resort (IR).
RWS has world-class attractions such as a casino, Universal Studios Singapore (USS), eight unique luxury hotels, and a host of dining and retail outlets.
The blue-chip IR operator reported a stellar set of earnings for its fiscal 2023’s first half (1H 2023).
Revenue jumped 63% year on year to S$1.1 billion, with gaming revenue leading the way with a 57.2% year on year increase to S$747 million for 1H 2023.
Attractions revenue also more than doubled year on year from S$69.7 million to S$160.6 million in line with a higher volume of tourists and locals.
Group operating profit more than tripled year on year to S$350.8 million while net profit soared from S$84.4 million in 1H 2022 to S$276.7 million in 1H 2023.
In tandem with the strong results, Genting Singapore increased its interim dividend by 50% from S$0.01 to S$0.015.
Looking ahead, the group is hard at work on revamping the IR to bring it to the next level with a project known as RWS 2.0.
Renovation work started on the Forum in May to create a 20,000-square-metre central lifestyle cluster with speciality shops, upscale restaurants, and entertainment options.
Construction of Minion Land at the USS and the Singapore Oceanarium are both progressing well.
An extension for Equarius Hotel and a new waterfront building will begin construction in 2024 once government approvals have been granted.
Centurion Corporation Ltd (SGX: OU8)
Centurion owns, develops and manages purpose-built worker accommodation assets (PBWAA) in Singapore and Malaysia and student accommodation assets (SAA) in Australia, the UK and the US.
The group’s portfolio comprises 34 accommodation assets with 66,628 beds as of 30 June 2023.
For 1H 2023, Centurion saw revenue rise 8% year on year to S$97.9 million.
The better top-line performance was contributed by high occupancies and positive rental reversion across Singapore, Malaysia, the UK and Australia.
Net profit from core operations improved by 14% year on year to S$33 million.
Centurion’s free cash flow also increased by nearly 19% year on year to S$53 million for 1H 2023.
The group has doubled its interim dividend from S$0.005 to S$0.01 in line with the good performance.
In Singapore, the outlook for PBWAA is positive with healthy positive rental reversions.
In March this year, the group received approval for bed capacity uplifts and will add 888 beds from April onwards.
Centurion also continued to add more PBWAA in Malaysia with 770 beds slated for completion in 3Q 2023 and another 2,720 beds ready in 2024.
Moving forward, Centurion will look to enhance its existing assets and execute capital recycling to acquire higher-yielding assets.
Union Gas Holdings (SGX: 1F2)
Union Gas is a provider of fuel products with three key divisions comprising Liquified Petroleum Gas (LPG), Natural Gas (LG), and Diesel.
The group has a fleet of more than 200 delivery vehicles, owns storage depots, and has two out of four bottling plants in Singapore.
Union Gas reported a mixed result for 1H 2023.
Total revenue dipped by 6% year on year to S$64.2 million largely due to a 37.7% year-on-year fall in diesel sales.
However, gross margin improved to 33.9% from 24.7% a year ago which led to a 29.1% year on year jump in gross profit to S$21.8 million.
Net profit more than doubled year on year to S$5.8 million in 1H 2023.
The business also generated a positive free cash flow of S$4.1 million, reversing the free cash outflow in the prior year.
Union Gas tripled its interim dividend from S$0.002 to S$0.006.
With reopened borders, the group will explore strategic opportunities to diversify and grow its business.
Union Gas will also streamline its organisational structure to achieve better cost efficiencies.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
