News headlines may warn of an impending recession, but some companies continue to do well.
These businesses have strong franchises or enduring tailwinds that help them to stay resilient to economic challenges.
If you’re an income investor looking for dividend-paying stocks, the above characteristics are what you should be looking for.
However, let’s go one step further.
By observing a company’s business development efforts and/or acquisitions, we can make an educated guess as to whether it can increase its profits and, in turn, the dividends it pays.
And by sifting these stocks out and adding them to your investment portfolio, you can then enjoy a build and grow the stream of passive income.
Here are four Singapore stocks that look likely to raise their dividends this year.
ComfortDelGro Corporation Limited (SGX: C52)
ComfortDelGro Corporation Limited, or CDG, is one of the world’s largest land transport companies with a fleet of 35,000 buses, taxis, and rental vehicles.
The group also operates light and heavy rail networks in Singapore and New Zealand.
For its 2022’s first quarter (1Q2022) business update, CDG remarked that most countries are now treating the COVID-19 virus as endemic.
Vaccination rates are improving, international travel has resumed and more countries have reopened their borders.
This news bodes well for the blue-chip land transport conglomerate as ridership for its services in various countries looks set to improve.
Revenue inched up by 3.9% year on year for 1Q2022 while operating profit before government reliefs nearly doubled year on year to S$102.5 million.
Meanwhile, CDG has also announced several acquisitions in recent months.
It acquired the assets of the Rothery’s Coaches business in Queensland, Australia, for S$6.7 million and broadened its Irish intercity presence with the acquisition of coach operator GoBus for S$17.5 million.
The group paid out a total of S$0.042 in dividends for its fiscal 2021 (FY2021), giving its shares a trailing dividend yield of 3%.
AEM Holdings Ltd (SGX: AWX)
AEM provides comprehensive semiconductor and electronics test solutions for its clients.
The group has manufacturing plants in Singapore, Malaysia, Indonesia, Vietnam, China, and Finland.
Last August, AEM announced that Temasek Holdings will become its largest shareholder with an 8.6% stake in the group.
The test solutions company also reported record revenue and profit before tax (PBT) for 1Q2022.
Revenue surged more than three-fold from S$80.2 million to S$261.9 million while PBT jumped from S$15.9 million to S$49.7 million.
The group is also expanding its presence in Singapore, Malaysia and the US with new facilities going operational by the end of this quarter.
AEM will more than double its manufacturing capacity in these three countries and increase its research and design capabilities.
The group paid out a total dividend of S$0.076 for FY2021 and has the potential to raise this further this year.
Boustead Projects Limited (SGX: AVM)
Boustead Projects Limited, or BPL, provides innovative real estate solutions to its clients in the aerospace, high-tech manufacturing, and pharmaceutical industries.
The group has a presence in Singapore, China, Malaysia and Vietnam.
BPL recently entered a new asset class by purchasing 28 & 30 Bideford Road in Singapore for S$515 million.
The property is a Grade A 18-storey freehold luxury mixed-use development that the group purchased to expand its real estate portfolio and increase its recurring income streams.
In addition, BPL was also awarded its largest contract to date of approximately S$300 million by a Fortune 500 company for the design and build of an integrated manufacturing, logistics and office facility in Singapore.
The group declared a final dividend of S$0.002 and a special dividend of S$0.008 for FY2022, bringing the total dividend to S$0.01.
Sembcorp Industries Limited (SGX: U96)
Sembcorp Industries Limited, or SCI, is an energy and urban solutions provider with a balanced energy portfolio of over 16.5 gigawatts (GW), with seven GW of renewable energy capacity comprising solar, wind and energy storage.
The group has reported promising business developments in the past few months.
SCI inked four agreements during Vietnam’s President’s visit to Singapore in the areas of industrial park development and renewable energy technology.
It was also appointed by the Energy Market Authority to build, own and operate an energy storage system on Jurong Island.
The utility group also recently completed its acquisition of a 98% interest in a 658 MW wind and solar asset portfolio in China.
SCI has issued positive profit guidance stating that its financial results for the first half of 2022 are expected to be “materially higher”.
The group paid out a total dividend of S$0.05 in FY2021 comprising an interim dividend of S$0.02 and a final dividend of S$0.03.
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Disclaimer: Royston Yang owns shares of Boustead Projects Limited.
