A stock that pays a dividend provides an investor with more than just a useful stream of passive income.
This payment also assures that the business generates a profit and has sufficient cash to dole out to shareholders.
While blue-chip stocks are often chosen for their stability and decent dividend yields, investors can also look further afield for instances of stable businesses that possess attractive qualities.
Some of these stocks may be smaller in size but enjoy a strong franchise and many years of operating track record.
Of course, it is also important that you assess the risks of each business to ensure you invest with your eyes open.
Here are three Singapore stocks that boast high dividend yields that you could add to your buy watchlist.
APAC Realty (SGX: CLN)
APAC Realty is a real estate services provider holding the ERA regional master franchise rights for 17 countries in the Asia-Pacific region.
The group is one of Singapore’s largest property agencies with 8,400 advisors as of 31 December 2022.
APAC Realty posted a downbeat set of earnings for 2022 as revenue dipped 4.7% year on year to S$705 million.
Net profit fell 25.1% year on year to S$26.4 million but was impacted by the fair value loss on its convertible loan.
Excluding this item, net profit would have declined by 16.2% year on year to S$29.6 million.
The weaker performance was blamed on rising inflation and the effect of the Singapore government’s property cooling measures imposed in September last year.
Despite the lower profit, APAC Realty declared a final dividend of S$0.0275, bringing 2022’s total dividend to S$0.0625.
The group’s trailing dividend yield stood at 10% based on the share price of S$0.625.
Looking ahead, APAC Realty’s business may come under further pressure as the Singapore government has rolled out its third round of property cooling measures since December 2021.
The additional buyer’s stamp duty (ABSD) was raised from 17% to 20% for Singaporeans buying their second property and from 25% to 30% for permanent residents.
The steepest increase was for foreigners where the ABSD was doubled from 30% to 60%.
These measures were introduced to curb speculation and to arrest the steady rise in prices across private property in Singapore.
Aztech Global (SGX: 8AZ)
Aztech Global provides one-stop design and manufacturing services for blue-chip customers, technology start-ups, and innovative companies.
The group owns four R&D centres and three manufacturing facilities in Asia and employs more than 2,500 staff worldwide.
For 2022, revenue surged by 31.4% year on year to S$820.2 million, buoyed by higher sales volume of IoT (Internet of Things) devices and data communication products.
However, net profit dipped by 9.7% year on year to S$67.2 million mainly because of foreign exchange losses.
If this effect was excluded, net profit would have soared 66.4% year on year to S$123.8 million.
A total dividend of S$0.045 was declared for 2022, giving Aztech Global’s shares a trailing dividend yield of 5.6%.
As of 17 February 2023, the group had secured a robust order book of S$718.6 million to be completed this year.
Aztech Global also recently expanded its manufacturing capacity in Malaysia by acquiring a 300,000-square-foot facility in Pasir Gudang.
Kimly Limited (SGX: 1D0)
Kimly is one of Singapore’s largest traditional coffee shop operators.
The group operates and manages a network of 84 food outlets, 166 food stalls, and several café and restaurant brands across Singapore.
2022 saw Kimly’s revenue climb 33.1% year on year to S$317.7 million, bolstered by revenue from the newly-acquired Tenderfresh Group.
Gross profit improved by 18.5% year on year to S$92.6 million but net profit declined by 13.4% year on year to S$34 million due to higher expenses and lower government grants.
2022’s dividend came up to S$0.0168 after including a final dividend of S$0.0112.
Kimly’s shares offer a trailing dividend yield of 5.3%.
The group is carrying out outlet revitalisation for five existing coffee shops to increase their rental income and yield.
At the same time, amenities will be upgraded and new food stalls introduced to liven up the place and attract more customers.
Kimly is also diversifying its food offerings with healthier rice bowls and customised set meals to meet evolving needs.
Elsewhere, the food and beverage group is also leveraging technology to launch an e-commerce channel for its food retail division and collaborating with digital platforms to increase visibility and awareness.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
