As we leave behind the Year of the Ox and welcome the Year of the Tiger, new investment opportunities beckon.
Last week, we showcased five Singapore stocks with catalysts that can allow them to perform well in 2022.
However, we have not forgotten about income-seeking investors who appreciate a stream of dividends flowing in as passive income.
As economies around the world slowly reopen, businesses should also enjoy a much-needed fillip.
And with a recovery in consumer spending and demand, many companies should also report higher revenue, net profit and cash flows.
With a more sanguine outlook for 2022, these businesses may also raise their dividends in tandem.
Here are four Singapore stocks that could pay out a sweet dividend bonanza to investors this year.
United Overseas Bank Ltd (SGX: U11)
United Overseas Bank Ltd, or UOB, is one of Singapore’s three largest banks.
The lender has weathered the pandemic well thus far.
For the first nine months of 2021 (9M2021), the group earned a record high fee income of S$1.8 billion and its earnings report also showed progress on strengthening its digital platform.
UOB has shown its willingness to reward shareholders for its strong results.
The bank paid out an interim dividend of S$0.60, higher than the S$0.55 paid out two years ago before the onset of the pandemic.
Just last month, the lender announced the acquisition of Citigroup’s (NYSE: C) consumer business in Malaysia, Thailand, Indonesia and Vietnam for S$5 billion.
The deal will accelerate its customer growth and also boost net profit over time.
With a higher net profit, there’s also a good chance the bank may hike its dividend for 2022.
Micro-Mechanics (Holdings) Ltd (SGX: 5DD)
Micro-Mechanics Holdings, or MMH, designs and manufactures high precision tools and parts used in the semiconductor industry.
For its fiscal 2022 first half (1H2022) ended 31 December 2021, the group reported a 10.7% year on year increase in revenue to a record high of S$40.8 million.
Net profit inched up by 4.6% year on year to S$9.5 million.
MMH declared an interim dividend of S$0.06, unchanged from last year.
The group has a history of raising its dividends as the semiconductor industry enjoys a boom due to increased digital adoption.
The full-year dividend was raised from S$0.10 to S$0.12 in FY2020, and then to S$0.14 for FY2021.
The World Semiconductor Trade Statistics projects that the global semiconductor market is poised to increase by 8.8% year on year, which should benefit MMH.
Should the group enjoy continued growth in revenue and profits, there’s a chance that dividends could be raised further down the road.
Q & M Dental Group (SGX: QC7)
Q & M Dental owns and operates the largest network of private dental clinics in Singapore, with 90 outlets on the island.
The group also operates five medical clinics and a dental supply and distribution company and has a network of 38 dental clinics in Malaysia, too.
For 9M2021, the dental group reported a 62% year on year jump in revenue while net profit more than doubled year on year to S$35.4 million.
Q & M declared an interim dividend of S$0.01, bringing 9M2021’s total dividend to S$0.03.
The group has been generous with dividends, paying out a special dividend of S$0.025 for FY2020 as well as a final dividend of S$0.005.
Trailing 12-month total dividend (excluding the special dividend) stood at S$0.035, giving its shares a trailing dividend yield of 6.1%.
Q & M has a goal of opening 30 dental clinics a year for the next 10 years, and the steady expansion of its network could bring in higher profits over time, setting the group up for increasing dividends.
Raffles Medical Group (SGX: BSL)
Raffles Medical Group, or RMG, is an integrated healthcare provider that owns three hospitals and more than 100 multidisciplinary clinics.
Revenue for the healthcare group climbed by 42.4% year on year to S$343.8 million for the first half of 2021 (1H2021) as RMG successfully pivoted its business to deal with vaccinations and polymerase chain reaction (PCR) testing.
Operating profit more than doubled year on year to S$56 million while net profit surged by 129% year on year to S$39.4 million.
The group is slated to release its full-year earnings on the morning of 21 February and could declare a dividend that’s higher than FY2020’s S$0.025.
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Disclaimer: Royston Yang owns shares of Micro-Mechanics and Raffles Medical Group.
