It’s no secret that dividend stocks are a favourite among Singaporeans.
And for good reason.
A key reason is dividends received are tax-free.
As such, dividend stocks can form a solid source of passive income that supports you when you choose to retire.
For myself, I have been deploying my spare cash into dividend-paying businesses over the years to build up my passive income flow.
You can, as well.
By being disciplined and in adding money into dividend-paying stocks such as REITs, you too can slowly grow your passive income into a sizable amount over time.
Here are four attractive Singapore dividend stocks that I plan to buy if I had S$20,000 of spare cash.
iFAST Corporation Limited (SGX: AIY)
iFAST is a financial technology (fintech) company that runs a platform for the buying and selling of unit trusts, equities and bonds.
The group has a presence in five countries, namely Singapore, Malaysia, Hong Kong, India, and China.
iFAST has been a consistent payer of quarterly dividends since its IPO back in December 2014.
The fintech group recently reported a stellar set of numbers for its fiscal 2021 third quarter (3Q2021).
Revenue for the quarter rose by 23.4% year on year to S$55.5 million while operating profit climbed by 22.4% year on year.
Net profit improved by 23.3% year on year to S$7.6 million.
In line with the good results, iFAST hiked its interim dividend to S$0.013, up 62.5% from a year ago.
The group’s trailing 12-month dividend stands at S$0.044, and its shares provide a trailing dividend yield of around 0.5%.
iFAST recently reported two encouraging milestones.
The firm’s wealth advisory arm, iGM Singapore, saw its assets under administration (AUA) cross the S$1 billion mark as of 30 September 2021.
A month later, its Malaysian wealth advisory arm also saw its AUA cross the RM 1 billion threshold.
The group recently unveiled a five-year growth plan to take its business to the next level.
Keppel DC REIT (SGX: AJBU)
Keppel DC REIT is a data centre REIT that owns a portfolio of 19 data centres across eight countries.
The REIT has been consistently increasing its distribution per unit (DPU) since its listing back in December 2014.
For 3Q2021, Keppel DC REIT reported a 2.5% year on year increase in gross revenue while net property income (NPI) inched up 2.3% year on year to S$63.8 million.
DPU rose 4.5% year on year to S$0.02462.
For the first nine months of 2021 (9M2021), DPU increased by 9.7% year on year to S$0.07386.
Annualised distribution yield based on 9M2021 DPU stands at 4.1%.
The REIT sports a healthy gearing level of 35.1% with a low cost of debt of just 1.6%.
It had just completed the acquisitions of two data centres, one in the Netherlands and one in China.
The REIT also struck a deal with telecommunications company M1 to invest in bonds and preference shares that provide a 9.17% annual coupon rate.
Singapore Exchange Limited (SGX: S68)
When it comes to dependable dividends, nothing beats owning a company with a natural monopoly.
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The bourse operator recently paid out a quarterly dividend of S$0.08 for its fiscal 2022 first quarter.
Trailing 12-month dividend stands at S$0.32, and its shares provide a trailing dividend yield of around 3.6%.
SGX’s recent fiscal 2021 full-year results saw the group report comparable year on year revenue while net profit slipped by 6% year on year to S$445 million.
However, the dip in net profit was attributed to higher expenses resulting from expenses related to two acquisitions during the fiscal year.
The group has continued to grow its suite of products to advance its ambition to become a multi-asset exchange.
Recently, the exchange listed two homegrown leveraged and inverse products from Phillip Capital Management, while also floating dairy derivatives in a partnership with New Zealand’s stock exchange operator.
SGX is confident of using a multi-prong approach to growing its business so that it can enjoy multiple revenue streams.
Frasers Logistics & Commercial Trust (SGX: BUOU)
Frasers Logistics & Commercial Trust, or FLCT, is a REIT that owns a portfolio of 103 properties across five countries.
As of 30 September 2021, the REIT’s portfolio is valued at S$7.3 billion and it enjoys high occupancy of 96.2%.
FLCT reported a sparkling set of earnings for FY2021, with revenue surging by 41.4% year on year to S$469.3 million.
Adjusted NPI rose by 37.5% year on year to S$355.2 million while DPU increased by 7.9% year on year to S$0.0768.
The trailing dividend yield stood at 5.2%.
Aggregate leverage, at 33.7%, allows the REIT to have a debt headroom of S$2.5 billion for further acquisitions.
Get Smart: Money in your pocket
Dividends represent a real, tangible return on your investment.
With this money in your pocket, the choice is yours on how you spend it, whether it’s a much-needed holiday, a great meal, or to further boost your savings.
The four stocks above are a start, but if you would like something more sustainable for the long haul, then you have to create a sustainable portfolio of dividend stocks that can pay you for life.
For instance, at The Smart Dividend Portfolio, we have carefully curated a portfolio of 23 top-notch dividend-paying stocks..
We believe these stocks can continue to sustain and even improve their dividend payouts as time goes by.
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Our safe-harbour stocks are a set of blue-chip companies that have been able to hold their own and deliver steady dividends. Growth accelerators stocks are enterprising businesses poised to continue their growth. And finally, the pandemic surprises are the unexpected winners of the pandemic.
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Disclaimer: Royston Yang owns shares of iFAST Corporation Limited, Keppel DC REIT, Singapore Exchange Limited and Frasers Logistics & Commercial Trust.