As stock prices rise, finding dividend stocks with a reasonable yield becomes tougher.
Investors need to be mindful of possible value traps if they encounter dividend yields that seem too good to be true.
On the flip side, businesses that are firing on all cylinders either do not pay a dividend or dole out a paltry one.
There is also a lingering misconception that small and mid-sized companies usually pay higher dividend yields because their shares remain under the radar.
The truth is — billion-dollar blue-chip companies can also offer a sizable dividend yield.
And if you own such stocks over the long-term, a steady increase in dividends means you will end up with a much higher yield eventually.
Here are four blue-chip stocks with a 4% or higher dividend yield.
Venture Corporation Limited (SGX: V03)
Venture is a global provider of technology products, services and solutions.
The group manages a portfolio of 5,000 products and solutions and has built expertise in domains such as life science, healthcare and wellness technology, and financial technology.
Venture has held up well during the pandemic, reporting a 4.9% year on year increase in revenue for its fiscal 2021 first half (1H2021).
Net profit increased by 7.6% year on year to S$140.4 million.
The group declared an interim dividend of S$0.25, unchanged from a year ago.
Venture’s trailing 12-month dividend of S$0.75 gives its shares a trailing yield of around 4.2%.
The future looks sanguine for the group as demand remains strong in the next 12 months.
Venture is also poised to support the launch of a new platform of next-generation devices in the second half of 2021.
Keppel DC REIT (SGX: AJBU)
Keppel DC REIT invests in both data centres and assets necessary to support the digital economy.
The REIT’s portfolio comprises 19 data centres across eight countries valued at around S$3.1 billion as of 30 June 2021.
For 1H2021, gross revenue rose 9% year on year to S$135.1 million while net property income (NPI) increased by 8.4% year on year to S$123.8 million.
Distribution per unit (DPU) jumped by 12.5% year on year to S$0.04924.
At a share price of S$2.39, annualised distribution yield (based on the first half of the fiscal year) stands at 4.1%.
Aggregate leverage remains low at 36.7%, affording sufficient debt headroom for Keppel DC REIT to undertake more acquisitions.
The REIT had recently announced two acquisitions to boost its DPU — the first involved its maiden data centre acquisition in Guangdong, China, while the other was for two data centre buildings in Eindhoven, Germany.
Demand for data centres is poised to increase with the growth of 5G. Research from Ericsson projects that 5G will account for 44% of total mobile subscriptions by 2026.
DBS Group (SGX: D05)
DBS Group is one of Singapore’s three largest banks.
The group has a presence in 18 markets and provides a full range of services in consumer, SME, and corporate banking.
The lender has posted a stellar set of results for 1H2021 by chalking up an all-time high net profit of S$3.7 billion.
Both fee income and assets under management continued to grow by 26.2% and 13% year on year.
The good news is that the central bank has also lifted dividend restrictions for all local banks, allowing DBS to restore its quarterly dividend to S$0.33, up from S$0.18 a year ago.
CEO Piyush Gupta expects this healthy business momentum to continue and has revised full-year loan growth to high single digits, while full-year fee income is expected to grow at mid-teens year on year.
Frasers Logistics & Commercial Trust (SGX: BUOU)
Frasers Logistics & Commercial Trust, or FLCT, owns a portfolio of 103 properties spread out across five countries — Singapore, Australia, Germany, the UK and the Netherlands.
Assets under management as of 30 June 2021 stood at S$6.8 billion.
For 1H2021 ended 31 March 2021, the REIT reported a sharp 95.1% year on year surge in revenue as a result of its merger with Frasers Commercial Trust.
Adjusted NPI soared by 79.3% year on year to S$173.9 million. DPU rose by 9.5% year on year to S$0.038 due to an increase in the number of issued units.
Annualised DPU stands at S$0.076, and FLCT’s units offer a forward dividend yield of around 5.2%.
The REIT’s occupancy rate remains high at 96.3% as of 30 June 2021 while aggregate leverage clocks in at 36.4%.
FLCT has a debt headroom of S$1.9 billion and a healthy interest coverage ratio of seven times, opening the REIT up to more debt-fuelled acquisition opportunities to further power its DPU growth.
Accelerate your retirement plans with these 5 SGX stocks. Their dividends are climbing, and are well-positioned to weather through storms in the future. We think at least one of them deserves a spot in your portfolio. To find out their names, grab a copy of your FREE special report: “Dividend Stocks That Can Pay You For Life” today. Click here to download now.
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Disclaimer: Royston Yang owns shares of DBS Group, Keppel DC REIT and Frasers Logistics & Commercial Trust.