In every crisis, companies will inevitably suffer from falling revenue and profits.
During a typical business cycle, businesses will undergo a downturn and upturn of demand for their products and services.
Every now and then, however, the world encounters a major event that dislocates the global economy.
During 2008-2009, the world went through a “Great Recession” when the US subprime mortgage market collapsed, plunging the banking system into disarray and causing a punishing bear market.
Almost 11 years after, we are faced with the COVID-19 pandemic that has wreaked havoc on a wide swath of industries and businesses.
However, there are a handful of companies that have managed to maintain their dividends despite these tough conditions.
Here are four of them that you may wish to consider adding to your watchlist.
iFAST Corporation Limited (SGX: AIY)
iFAST is a wealth management financial technology (fintech) company with assets under administration (AUA) of S$11.15 billion as of 30 June 2020.
The group has built a well-established fintech ecosystem that connects product providers to end-clients and is present in Singapore, Malaysia, China, India and Hong Kong.
For the first half of 2020, gross revenue grew 33% year on year to S$77 million, while net profit attributable to shareholders doubled from S$4.1 million to S$8.2 million.
The strong performance was due to an acceleration of digital adoption in the wealth management industry, leading to record net inflows of S$1.25 billion in the first six months of this year.
iFAST has maintained its interim dividend of S$0.0075 for the quarter. Last year, the fintech group paid out a total dividend of S$0.0315.
The group is retaining cash both to grow its business and for funding its digital bank ambitions should it be successful in clinching the licence.
As a recap, iFAST partnered with Yillion and Hande Group in China to bid for a digital wholesale bank licence back in January.
In June, the Monetary Authority of Singapore announced that iFAST was one of nine companies that have met the eligibility requirement to progress to the next stage of evaluation.
Neo Group Ltd (SGX: 5UJ)
Neo Group is an integrated food solutions provider.
The group has been named the number one events caterer in Singapore and its catering arm owns brands such as Deli Hub and Orange Clove.
Neo also runs other business segments such as food retail, food manufacturing and trading of supplies.
For the group’s recent full fiscal year 2020 earnings, it posted a slight increase of 2.7% year on year in revenue.
Net profit jumped by 21.2% year on year to S$6.3 million despite the pandemic crimping demand for events catering.
Neo has maintained its final dividend of S$0.005, even while construction is taking place for its new headquarters and catering hub at 30B Quality Road.
Raffles Medical Group Ltd (SGX: BSL)
Raffles Medical Group, or RMG, is an integrated healthcare services provider.
The group owns its flagship Raffles Hospital at Bugis as well as a network of clinics spread around Singapore.
It also operates medical facilities in 13 other cities across China, Japan, Vietnam and Cambodia.
RMG recently announced its first-half 2020 earnings, with revenue dipping by 5.4% year on year as hospitals saw the deferment of elective surgeries along with fewer offshore patients.
Profit after tax plunged by 41.6% year on year to S$16.3 million, largely due to start-up expenses incurred for its new Chongqing hospital in China.
Excluding the China division, net profit after tax would have declined by a smaller 3.7% year on year.
Despite the challenges, the group has maintained its interim dividend of S$0.005 and has a healthy cash position of S$151.5 million to weather the downturn.
Hongkong Land Holdings Limited (SGX: H78)
Hongkong Land Holdings, or HKL, is a major property investment, management and development group.
The group owns and manages around 850,000 square metres of prime office and luxury retail properties in Hong Kong, Singapore, China and Indonesia.
For the first half of 2020, HKL reported a 24% year on year decline in net profit attributable to shareholders due mainly to rental relief extended to retail tenants and fewer residential developments completed.
However, the group has maintained its interim dividend of US$0.06 per share.
Chairman Ben Keswick gave a mixed outlook for the second half, with underlying profit expected to improve due to higher development property completions in China, but offset by continued stress on retail and commercial property rents brought about by the pandemic.
Download your FREE special REITs report: “How You Can Make Money Investing In REITs During This Pandemic” HERE or in the box below!
We cover the pandemic’s impact on REITs in Singapore, and dive into the different sectors of Hospitality REITs, Retail REITs, Commercial REITs, Industrial REITs, Healthcare REITs.
Disclaimer: Royston Yang owns shares in iFAST Corporation Limited and Raffles Medical Group Ltd.