Dividends are, without a doubt, a crucial part of anyone’s retirement plan.
As you age gracefully and bow out of the working world, it’s time to slow down, pursue your passions, and connect more deeply with your loved ones.
However, many people may forget that retirement also means losing your core source of active income.
With zero cash inflow from your job, you will need to rely on other sources.
You can choose to draw down on your cash stash and CPF balances during your retirement but there is a risk you may deplete them sooner than you intended.
A steady stream of dividends can help to support your lifestyle and provides a passive source of income that you can rely on as you sit back and relax.
Here are four Singapore stocks that can generate a reliable stream of dividend income to last you through your golden years.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange, or SGX, is Singapore’s sole stock exchange operator.
The blue-chip bourse operator has been a reliable payer of dividends and has doled out a dividend every single year since its fiscal 2001 (FY2001).
The annual dividend back then was just S$0.055 but has since increased over the years to end at S$0.32 in FY2022.
SGX reported a respectable set of earnings for its fiscal 2023’s first half (1H FY2023) ending 31 December 2022.
Revenue was up 10% year on year to S$571 million while net profit jumped 30% year on year to S$285 million.
The group declared an interim quarterly dividend of S$0.08, bringing 1H FY2023’s total dividend to S$0.16.
Shares of SGX offer a trailing dividend yield of 3.6%.
SGX’s multi-asset platform continues to gain tractor, with daily average volume rising 10% year on year to more than one million contracts.
VICOM Ltd (SGX: WJP)
VICOM is a leading test and inspection group that offers a comprehensive range of testing services for vehicles and in fields such as mechanical, biochemical, civil engineering, and more.
The group has a long history and track record of paying consistent dividends.
In the vehicle testing space, VICOM has a market share of close to 75% in 2021 and this dominance ensures the group can snag the bulk of the vehicle testing market for many years to come.
VICOM pulled off a commendable performance for 2022, booking a 7.3% year on year increase in revenue to S$108.3 million.
Net profit inched up 5.7% year on year to S$26.2 million.
The group also generated S$16.5 million of free cash flow for 2022.
A final dividend of S$0.0332 was declared, bringing the total dividend for 2022 to S$0.0664.
VICOM’s shares yield 3.6% at the last close of S$1.86.
Haw Par Corporation Limited (SGX: H02)
Haw Par is a conglomerate with four core divisions – healthcare (Tiger Balm), leisure (underwater world Pattaya), properties, and investments.
The group has a long track record of doling out dividends.
It paid out S$0.20 per year from 2010 all the way through to 2017, with a special dividend of S$0.15 paid in 2015.
Haw Par’s dividend then rose to S$0.30 per year in 2018 and has been kept at this level till 2021.
In 2018, the group also paid out a special S$0.85 dividend to commemorate its 50th anniversary.
For 2022, revenue grew 29% year on year to S$182.1 million as countries reopened their borders and Haw Par’s healthcare division rebounded.
Net profit climbed 34.7% year on year to S$148.3 million.
The conglomerate also generated a positive free cash flow of S$21.2 million for the year and has declared a S$0.30 dividend.
Its shares offer a trailing dividend yield of 3.2%.
Singapore Technologies Engineering Ltd (SGX: S63)
Singapore Technologies Engineering, or STE, is an engineering and technology group that serves the aerospace, smart city, and defence segments.
Like the other three companies mentioned here, STE also has a long and impressive track record of paying out dividends.
The group has paid out an annual dividend of S$0.15 over the past five years (2017 to 2021) but raised this dividend to S$0.16 for 2022.
Revenue for last year jumped 17% year on year to S$9 billion while adjusted net profit (less exceptional, one-off items and government support) increased by 39% year on year to S$549 million.
STE snagged S$13.1 billion in new contracts for 2022, bringing its order book to a three-year high of S$23 billion.
Not sure where to park your money in 2023? Give dividend stocks a try. You don’t need a lot of capital to start a stream of passive income. Our latest guide will show you how to invest and where to find the juicy dividends in SGX. Click here to download the report for FREE.
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Disclosure: Royston Yang owns shares of Singapore Exchange Limited and VICOM.