Earnings season is a period you should look forward to if you are an income investor.
As companies and REITs announce their financial results, many will also declare dividends that act as a stream of passive income going straight into your bank account.
The current earnings season is no different, though it comes with a positive spin this round.
Call it a belated Lunar New Year “Ang Pow” if you will, but some blue-chip companies have declared special dividends as they report their 2022 earnings.
Despite facing tough macroeconomic conditions, these stocks have witnessed strong business growth and can afford to reward their shareholders with higher payouts.
Here are four Singapore blue-chip stocks that are doling out a special dividend.
DBS Group (SGX: D05)
Singapore’s largest bank, DBS Group, is one of the big beneficiaries of higher interest rates.
The lender saw its 2022 net profit hit a new record high of S$8.2 billion when it reported its results early last month.
In line with the good results, the bank not only upped its quarterly dividend from S$0.36 to S$0.42 but also declared a special dividend of S$0.50.
DBS reported that its asset quality remained resilient during the fourth quarter of 2022 (4Q 2022), with its non-performing loans ratio dipping to 1.1% from 1.2%.
Management expects interest rate increases to moderate although it does not expect any cuts this year.
DBS projects that its loan book will grow by mid-single-digits year on year while fee income should rise by double-digits with China’s reopening.
The peak net interest margin should also hover close to 2.2% while there are sufficient provisions in place to hedge against any unexpected risks.
City Developments Limited (SGX: C09)
City Developments Limited, or CDL, is a global real estate firm with a network covering 104 locations in 29 countries and regions.
The group dished out the highest profit in its history due to several divestments in 2022 and declared a special dividend of S$0.08 to reward shareholders.
Together with its interim dividend of S$0.12 and a final dividend of S$0.08, the total cash dividend for last year came up to S$0.28, significantly higher than the cash dividend of S$0.12 in 2021.
Looking ahead, the real estate giant has a Singapore residential development launch pipeline of more than 2,100 units spread out over this year and the next.
CDL also has ongoing asset redevelopment initiatives for Newport Plaza and Central Mall cum Central Square that will result in a gross floor area uplift.
Elsewhere, its hotel operations division should continue to enjoy improvement as travel demand booms with the easing of restrictions in most countries.
CapitaLand Investment Limited (SGX: 9CI)
CapitaLand Investment Limited, or CLI, is a real estate investment manager with S$132 billion of assets under management (AUM) and S$88 billion of funds under management (FUM) as of 31 December 2022.
CLI handed in a robust report card for 2022 that saw all its divisions posting year on year growth.
The group not only declared a cash dividend of S$0.12 but also a special dividend in the form of units of CapitaLand Ascott Trust (SGX: HMN), valued at S$0.059 per share.
Group CEO Lee Chee Koon is determined for CLI to forge ahead with strategies to enhance both its AUM and FUM, such as the launch of RMB-denominated funds and self-storage fund platforms within Southeast Asia.
With China’s reopening, the real estate behemoth can resume recycling capital there while the underlying business in the Middle Kingdom also recovers along the way.
CLI’s Lodging unit is also showing good promise as it chalked up a record year of signings and property openings because the group acquired the Oakwood platform.
Sembcorp Industries Ltd (SGX: U96)
Sembcorp Industries Ltd, or SCI, is an energy and urban solutions provider with a balanced energy portfolio of 16.7 GW and an urban development project portfolio spanning more than 12,000 hectares across Asia.
The utility giant turned in a sparkling set of earnings as its 2022 net profit more than tripled year on year in tandem with higher power prices.
A special dividend of S$0.04 was declared along with a final dividend of S$0.04, bringing 2022’s full-year dividend to S$0.12.
SCI is bulking up on its renewables portfolio with gross installed capacity hitting 9.8 GW, just shy of its 2025 target of 10 GW.
Just last month, the utility player secured a long-term power purchase agreement with a unit of Micron Technology (NASDAQ: MU).
The 18-year agreement will supply Micron with up to 450 MW of power and add to SCI’s earnings for 2023.
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Disclosure: Royston Yang owns shares of DBS Group.
