Investors are always keen to read about business growth in the form of higher revenue and net profits.
Such growth results in a higher share price as the business becomes more valuable, thus rewarding the investor with capital gains.
However, income-seeking investors can also use the same cues to search for stocks that pay out increasing dividends.
Most businesses with rising profits and cash flows will also pay out higher dividends.
If you’re looking for stocks that have the potential to up their dividends, you can look for those that are reporting better financial numbers and healthy prospects.
Here are four Singapore stocks that could increase their dividend payments next year.
Nanofilm Technologies International Ltd (SGX: MZH)
Nanofilm Technologies is a provider of nanotechnology and technology-based solutions across a wide range of industries.
The group reported a healthy set of earnings for its fiscal 2022’s first half (1H2022).
Revenue rose 15.2% year on year to S$111.3 million, with broad-based year on year revenue increases across all three of Nanofilm’s divisions.
Net profit increased by 5.1% year on year to S$18.8 million but adjusted net profit (excluding COVID-19 expenses) climbed nearly 18% year on year.
Nanofilm hiked its interim dividend by 10% year on year to S$0.011.
The group has ambitious growth plans and is exploring a potential joint venture in advanced battery components for electric vehicles in China.
It also plans to explore acquisition opportunities to gain access to new customers in different regions.
Meanwhile, Nanofilm is working on setting up a coating services facility and expanding its nanofabrication production in the near term.
Raffles Medical Group (SGX: BSL)
Raffles Medical Group, or RMG, is an integrated healthcare services provider with a network that includes three tertiary hospitals and more than 100 multi-disciplinary clinics.
Revenue for 1H2022 improved by 11.2% year on year to S$382.3 million as more local and foreign patients sought treatment as air travel resumed and restrictions were eased.
Operating profit surged 54.1% year on year to S$86.4 million while net profit soared 51.3% year on year to S$59.7 million.
Free cash flow also soared nearly three-fold from S$42.5 million a year ago to S$123.1 million.
RMG has received the approval to set up an in-vitro fertilisation and assisted reproductive therapy centre in Hainan, China.
This new facility will complement its healthcare offerings in Shanghai, Chongqing and Beijing and serve an estimated 40 million women who may require reproductive fertility services.
Sheng Siong Group Ltd (SGX: OV8)
Sheng Siong operates one of the largest supermarket chains in Singapore and has a total of 66 outlets in heartland areas around the island.
For 1H2022, the group saw revenue dip 0.7% year on year to S$676.8 million.
The slight decline was due to a surge in 1H2021 in tandem with COVID-19 restrictions.
Gross profit inched up 3.4% year on year to S$199.1 million, and net profit increased by 2.1% year on year to S$67.5 million.
Sheng Siong declared an interim dividend of S$0.0315, slightly higher than the prior year’s S$0.031.
The group intends to prospect for spaces in new HDB estates to establish a presence in areas where it currently does not have a presence.
A strong catalyst will be the opening of new stores to drive growth for the business even as economies reopen and grocery spending normalises.
Construction of HDB flats has resumed and Sheng Siong will have a better chance of bidding successfully for new spaces this year.
The group will also work on improving its sales mix by shifting to higher-margin products.
The Hour Glass Limited (SGX: AGS)
The Hour Glass, or THG, operates 50 boutiques in the Asia Pacific region selling a variety of luxury watches.
The group carries popular Swiss watch brands such as Patek Philippe, Rolex, Hublot, and Omega.
For the fiscal year 2022 (FY2022) ending 31 March 2022, THG reported a 39% year on year jump in revenue to S$1 billion.
Net profit surged 86% year on year to S$157 million.
Free cash flow increased by 28.8% year on year from S$161.7 million to S$208.4 million.
A final dividend of S$0.06 was paid out, higher than the previous year’s S$0.04.
If interest continues to remain high for high-quality mechanical watches, then THG should report higher revenue and net profit in FY2023.
With higher free cash flow and better prospects, there is a good chance the luxury retailer will up the dividend.
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Disclaimer: Royston Yang owns shares of Raffles Medical Group.
