Income investors rely on dividends to help to supply them with a stream of passive income.
Because dividends are a major pillar of their investment philosophy, these investors look for reliability and certainty when it comes to dividend payments.
As such, the key is to look for businesses that have consistently paid out dividends for a long time.
This evidence will reassure income investors that the business is on solid footing and can continue to dish out dividends for the foreseeable future.
We highlight four Singapore companies that boast an impressive track record of paying out dividends for two decades or more.
DBS Group (SGX: D05)
DBS is no stranger to most investors, being Singapore’s largest bank by market capitalisation.
The blue-chip lender is one of the most consistent dividend payers in the stock market, and has paid a dividend since 2001, marking 23 consecutive years of dividend payments.
DBS reported a strong set of earnings for the first half of 2024, buoyed by rising interest rates that benefitted the bank’s net interest income (NII).
Total income rose 11% year on year to S$11 billion on the back of a 6% year-on-year increase in NII to S$7.4 billion.
Profit before allowances climbed 10% year on year to S$6.8 billion.
Net profit came in at S$5.7 billion, a record half-year high, and was up 10% year on year.
DBS declared and paid out a quarterly dividend of S$0.54, a 22.7% year-on-year increase from the S$0.44 paid out a year ago.
Looking back at DBS’s final dividend of S$0.12 back in 2001, this translates to a quarterly dividend of S$0.06 per share.
The lender’s dividend has soared ninefold in 23 years, an impressive feat.
CEO Piyush Gupta painted a sanguine outlook for the bank.
NII is expected to rise in the mid-single-digit percentage which non-interest income growth is projected to be in the mid-to-high teens percentage.
He expects DBS to report net profit growth in the mid-to-high single-digit year on year range.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The group operates a platform for the buying and selling of a wide variety of securities such as shares, bonds, and derivatives.
SGX has been paying out dividends since its listing in 1999 and its fiscal 2003 (FY2023) dividend stood at S$0.051.
Fast forward to FY2024 (ending 30 June 2024) and the bourse operator’s annual dividend stood at S$0.345, more than six times what it paid out 21 years ago.
SGX reported a solid set of earnings for FY2024.
Revenue inched up 3.1% year on year to S$1.2 billion.
Net profit, after adjusting for one-off items, rose 4.5% year on year to S$525.9 million.
The group raised its quarterly dividend from S$0.085 to S$0.09, taking its annualised dividend to S$0.36.
SGX intends to enhance connectivity across Asia through regional partnerships while scaling its client acquisition activities across Europe and Asia to benefit its foreign exchange franchise.
Boustead Singapore Limited (SGX: F9D)
Boustead Singapore Limited, or BSL, is a conglomerate with four divisions – energy engineering, real estate, geospatial technology, and healthcare.
BSL has paid out dividends without fail since its listing back in fiscal 2003 (FY2003), making it 21 consecutive years that the engineering firm has doled out dividends.
The group’s ability to do so hinges on its conservative stance – by always maintaining a strong balance sheet and ensuring that the business generates copious amounts of free cash flow.
For its fiscal 2024 (FY2024) ending 31 March 2024, revenue jumped 37% year on year to S$767.6 million.
Net profit after adjusting for one-off items doubled year on year from S$31.5 million to S$63.3 million.
The conglomerate declared and paid out a final dividend of S$0.04, taking the total FY2024 dividend to S$0.055.
This dividend compares favourably to FY2003’s total dividend of just S$0.0075.
The business also generated healthy free cash flow for both FY2023 and FY2024 of S$74 million and S$91.8 million, respectively.
BSL’s engineering order backlog stood at around S$247 million as of 31 March 2024.
Its geospatial division’s deferred services backlog was at a record high of S$129 million.
Haw Par Corporation Limited (SGX: H02)
Haw Par is also a conglomerate with four distinct divisions – healthcare, leisure, real estate, and investments.
The group owns the famous Tiger Balm brand that manufacturers and markets ointments, pain patches, and salves.
Haw Par has paid dividends for the last 28 years without fail, with its 1996 annual dividend coming in at S$0.081.
This annual dividend was raised gradually to S$0.113 in 2000 and to S$0.19 by 2005.
The dividend was raised further to S$0.20 from 2006 to 2010 and increased to S$0.30 in 2019.
Haw Par reported a robust set of earnings for 1H 2024 with revenue rising 6.3% year on year to S$118.1 million.
Net profit improved by 17.1% year on year to S$122 million and the healthcare conglomerate also generated a positive free cash flow of S$15 million for 1H 2024.
An interim dividend of S$0.20 was declared, taking its annualised dividend to S$0.40 per share.
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Disclosure: Royston Yang owns shares of DBS Group, Singapore Exchange Limited and Boustead Singapore Limited.
