Singapore’s Central Provident Fund (CPF) scheme is effective in helping you to save for retirement.
The CPF Ordinary Account (OA) currently provides a steady return of 2.5% per annum on the balance within the account.
While this return is nearly risk-free, it may not help you to beat inflation over the long term.
By investing your money in stocks that pay out regular dividends, you can enjoy a sustainable dividend yield which is much higher than what the CPF OA can offer.
Here are four Singapore stocks with more attractive yields than the CPF OA.
First REIT (SGX: AW9U)
First REIT is a healthcare REIT with a portfolio of 32 properties across Asia with total assets of around S$1.1 billion as of 31 December 2023.
This portfolio includes 15 properties in Indonesia, three nursing homes in Singapore, and 14 nursing homes in Japan.
For the first half of 2024 (1H 2024), rental income dipped by 3.7% year on year to S$52 million.
Net property income fell by 4.1% year on year to S$50.3 million.
First REIT’s distribution per unit (DPU) slipped by 3.2% year on year to S$0.012.
The healthcare REIT’s trailing 12-month DPU stood at S$0.0244, giving its units a trailing distribution yield of 9.6%.
The results were impacted by the stronger Singapore dollar against the Indonesian Rupiah and Japanese Yen.
However, this was offset by higher rental income from the assets in Indonesia and Singapore.
First REIT sports a gearing ratio of 39.5% as of 30 June 2024 and has 86.6% of its loans pegged to fixed rates.
The manager plans to diversify into developed markets such that more than half of its assets derive revenue from this region by 2027.
There are also plans to recycle capital from non-core or mature assets which strengthens its capital structure.
Fraser & Neave Ltd (SGX: F99)
Fraser & Neave, or F&N, is a household name in the Asian region with two main divisions – food and beverage (F&B), and publishing and printing.
Its F&B division owns famous brands such as 100Plus, Nutrisoy, Magnolia (milk), Seasons, and Fruit Tree.
For the first half of fiscal 2024 (1H FY2024) ending 31 March 2024, F&N saw its revenue inch up 2.5% year on year to S$1.1 billion.
Net profit shot up 52.5% year on year to S$83.8 million driven by improved margins from a favourable product mix, cost efficiencies, and lower commodity costs.
An interim dividend of S$0.015 was declared, unchanged from the prior year.
F&N’s trailing 12-month dividend came in at S$0.055, giving its shares a trailing dividend yield of 4.7%.
The F&B group strengthened its presence in Cambodia by securing a land lease for the construction of a new dairy manufacturing facility.
Operations are slated to commence in 1Q 2026.
Meanwhile, F&N has also advanced on F&N Agrivalley, an integrated dairy farm project, located in Negeri Sembilan, Malaysia.
The first batch of cattle has been selected for this project and the first milking target is slated for early 2025.
CSE Global (SGX: 544)
CSE Global is a systems integrator that provides electrification, communications, and automation solutions across various industries.
The group paid out a dividend of S$0.0275 for 2023, translating into a trailing dividend yield of 5.7%.
CSE Global provided upbeat guidance for its 1Q 2024 business update.
Revenue climbed nearly 24% year on year to S$197.5 million, driven by the electrification business segment with the progressive execution of orders secured last year.
The business enjoyed a higher order intake for 1Q 2024, with S$186.2 million of orders secured, up 16.7% year on year.
The higher orders have pushed the group’s order book to S$719.3 million, which is nearly 50% higher than the S$480.2 million reported for 1Q 2023.
CEO Lim Boon Kheng believes that CSE Global is off to a good start for 2024 and he believes that the group’s two-prong approach of growing its client base and completing complementary acquisitions puts the business in good stead to continue growing.
Aztech Global (SGX: 8AZ)
Aztech Global is a designer and manufacturer of IoT (Internet of Things) devices and data communication products.
The group has four R&D centres in Singapore, Hong Kong, and China along with three manufacturing facilities in China and Malaysia.
Aztech Global’s revenue for 1H 2024 dipped by 4% year on year to S$373.2 million.
Net profit rose 8.7% year on year S$46.7 million.
The group’s free cash flow leapt more than fourfold year on year to S$57.1 million.
An interim dividend of S$0.05 was declared, taking Aztech Global’s trailing 12-month dividend to S$0.10.
Shares of the group yield 9.8% based on the last closing price of S$1.02.
The group recently increased its R&D headcount by 11% to enhance its R&D capabilities.
It also implemented a manufacturing execution system to automate better workflow to improve operational efficiency, production yield, and product quality.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
