Income investors are always looking for solid, dependable dividend stocks.
These are businesses that generate consistent free cash flow and are willing to pay out a portion of it as dividends to their shareholders.
It is even better if a company can grow its dividends over time as its revenue, profits and cash flow increase.
By doing so, you can compound your dividends and achieve a stream of growing passive income to better prepare yourself for retirement.
Here are four Singapore stocks that could be poised to increase their dividend payouts.
iFAST Corporation Limited (SGX: AIY)
iFAST is a financial technology company that operates a platform for the buying and selling of unit trusts, equities, and bonds.
The group reported a stellar set of results for the first quarter of 2024 (1Q 2024).
Total revenue for 1Q 2024 jumped 59.4% year on year to S$86 million while operating profit leapt more than fourfold year on year from S$4 million to S$18.5 million.
The increase was attributed to contributions from iFAST’s Hong Kong ePension division along with improvements in the group’s core wealth management business.
Net profit also soared more than fourfold year on year to S$14.5 million.
The group’s assets under administration increased by 16% year on year to hit a new record of S$21 billion.
iFAST upped its first interim dividend by 30% from S$0.01 to S$0.013.
Looking ahead, management expects 2024 to see “robust” growth rates in revenue and profitability compared to 2023.
With the Hong Kong ePension division becoming an important growth driver for the group in both 2024 and 2025, investors can look forward to higher profits and dividends in the coming quarters.
CDL Hospitality Trusts (SGX: J85)
CDL Hospitality Trusts, or CDLHT, is a hospitality trust with a portfolio of 19 properties and one build-to-rent project.
Its assets under management stood at around S$3.3 billion as of 31 March 2024 and its properties are located in countries such as New Zealand, Singapore, the Maldives, Japan, and Australia.
For its 1Q 2024 operational update, CDLHT saw total revenue rise 7.3% year on year to S$65.3 million.
The trust’s net property income improved by 6.8% year on year to S$34.9 million.
CDLHT also reported year-on-year increases in revenue per available room (RevPAR) across all its territories for the quarter.
Looking ahead, there are positive developments announced this year that will enhance Singapore’s appeal as a tourism destination, such as a S$300 million boost from the Tourism Development Fund and a S$165 million Major Sports Event Fund.
The trust’s overseas portfolio should benefit from a broad recovery in international tourism.
REIT investors can expect CDLHT to report higher distributions when it announces its first half of 2024 (1H 2024) earnings.
Sheng Siong Group (SGX: OV8)
Sheng Siong is one of the largest supermarket chains in Singapore with 70 outlets across the island.
The group sells a wide variety of products ranging from live and fresh produce to processed food and toiletries/daily necessities.
Sheng Siong saw both its revenue, net profit, and cash flow increase for its latest 1Q 2024.
Revenue improved by 5.5% year on year to S$376.2 million with gross profit climbing 7.6% year on year to S$110.7 million.
The retailer’s net profit rose 8.9% year on year to S$36.3 million.
Sheng Siong’s free cash flow more than doubled year on year from S$13.9 million to S$34.5 million in 1Q 2024.
The sharp increase in free cash flow, along with better profitability, may signal higher dividends when the supermarket operator releases its 1H 2024 earnings in August.
Meanwhile, Sheng Siong is awaiting the outcome of four new stores that it tendered for and management expects six more tenders to be put up for the remainder of 2024.
Its China business with five stores is also profitable and the group’s sixth store should be operational by the end of this quarter.
Sembcorp Industries Ltd (SGX: U96)
Sembcorp Industries Ltd, or SCI, is an energy and urban solutions provider with a gross renewables capacity of 14.3 GW as of March 11, 2024, and a project portfolio spanning 14,000 hectares across Asia.
The blue-chip group reported a mixed set of results for 2023.
Revenue fell 10% year on year to S$7 billion but core net profit (before exceptional items) climbed 38% year on year to S$1 billion.
In tandem with the better performance, SCI upped its 2023 dividend to S$0.13 from S$0.12 a year ago.
In late April, the group signed two long-term power purchase agreements with subsidiaries under Equinix Inc (NASDAQ: EQIX) for its data centre portfolio in Singapore.
SCI has pledged to grow its renewables portfolio to hit 25 GW by 2028 as communicated during last year’s Investor Day session.
The group could also be well-positioned to increase its dividend again as it builds its portfolio and grows its business.
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Disclosure: Royston Yang owns shares of iFAST Corporation.
