It’s an understandable move as these categories of stocks offer both certainty and reliability.
However, in the interest of diversification, investors should look for other categories of stocks that still offer a healthy dividend yield while paying out a sustainable dividend.
Smaller companies may fit the bill, but the key is to ensure the business remains robust and has a clear track record of dividend payments.
We managed to tease out four companies that are flying under the radar with dividend yields higher than 4%.
You can consider adding some or all of them to your watchlist to aid the diversification of your investment portfolio.
Nordic Group Ltd (SGX: MR7)
Nordic Group is a provider of systems integration solutions, vessel maintenance and repairs, and maintenance and overhaul (MRO) services to clients in the marine, offshore oil and gas, and petrochemical sectors.
The group has a production facility in Suzhou, China, and an extensive network of sales agents that cover Singapore and China.
Nordic Group reported an admirable set of earnings for its fiscal 2022’s first half (1H2022).
Revenue surged by 62% year on year to S$79.8 million while net profit jumped 49% year on year to S$11.6 million.
In line with the good results, the group upped its interim dividend to S$0.01162, higher than the S$0.0098 paid out the year before.
Together with last year’s final and special dividends of S$0.00608 and S$0.00152, Nordic Group’s trailing 12-month dividend stands at S$0.01922, giving its shares a trailing dividend yield of 4.6%.
Even if we exclude last year’s special dividend, Nordic’s shares still offer an attractive dividend yield of 4.2%.
CSE Global Ltd (SGX: 544)
CSE Global is an engineering specialist that designs and builds customised, integrated systems for clients to help solve their problems.
The group has a presence across 16 countries and employs more than 1,400 employees around the world.
For FY2021, revenue took a 6.8% year on year dip to S$468.7 million while net profit plunged by 46.4% year on year to S$15 million.
The weaker performance was due to COVID-19 disruptions and volatile energy prices.
On the bright side, the group generated S$19.1 million of free cash flow for the year and also saw a 7.1% year on year increase in new orders received at S$462.1 million.
A final dividend of S$0.015 was paid out, similar to a year ago.
Coupled with CSE Global’s interim dividend of S$0.0125, the historical annual dividend came up to S$0.0275, giving its shares a dividend yield of 5.7%.
PropNex Limited (SGX: OYY)
PropNex is an integrated real estate services provider with over 11,744 sales professionals as of 1 August.
The group provides real estate brokerage, training and real estate consultancy.
For 1H2022, revenue slipped by 1.8% year on year to S$472.3 million.
Net profit slid 17.7% year on year to S$28.3 million as cooling measures imposed in December 2021 caused buyers to hold back on their purchases.
Despite the weaker results, PropNex declare an interim dividend of S$0.055, similar to what was paid out last year.
Together with last year’s final dividend of S$0.07, the trailing 12-month dividend stands at S$0.125, giving PropNex’s shares a trailing dividend yield of 7.4%.
Boustead Singapore Limited (SGX: F9D)
Boustead Singapore is a conglomerate with four key divisions – energy and engineering, real estate solutions, geospatial technology, and healthcare.
For its FY2022 ended 31 March 2022, Boustead Singapore reported an 8% year on year dip in revenue to S$631.8 million.
The decline was due to tough conditions in the oil and gas sector along with disruptions caused by the COVID-19 pandemic that affected its real estate solutions business.
Net profit, adjusted for one-off and exceptional items, fell by 28% year on year to S$32.3 million.
Free cash flow, however, remained healthy at S$52.4 million.
Despite the weaker results, the group has proposed a final dividend of S$0.025, taking total dividends for FY2022 to S$0.04, comparable to what was paid out in FY2021.
The group’s shares sport a dividend yield of 4.3%.
For FY2022, Boustead Singapore was awarded around S$193 million in new contracts, taking its order book backlog to S$274 million.
In addition, the group’s 54%-subsidiary Boustead Projects Limited (SGX: AVM) was awarded a record contract of around S$300 million last month for the design and build of an integrated manufacturing, logistics and office facility in Singapore.
This win takes Boustead Group’s order backlog to approximately S$563 million.
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Disclaimer: Royston Yang owns shares of Boustead Singapore Limited.