As you embark on your first steps in investing, it’s helpful to search for solid, dividend-paying companies.
The ability to pay consistent and dependable dividends is usually associated with financial strength and resilience, as demonstrated by certain blue-chip companies.
If you’re a beginner investor, you should start building up a portfolio of stocks that comprise a mix of growth and dividends.
Through the power of compounding, you can reinvest these dividends over time to grow your passive income stream.
Here are five dividend stocks that are suitable for a new investor’s watchlist.
DBS Group (SGX: D05)
DBS is one of Singapore’s three largest banks and offers a comprehensive range of banking services to individuals and corporations.
The lender has withstood the pandemic thus far and reported a stellar set of results for its fiscal 2021 first quarter.
Net profit surged to S$2 billion, a record for the bank.
Growth was backed by healthy loan growth of 5% year on year amid a pandemic.
DBS paid out an interim dividend of S$0.18, with annualised dividend clocking in at S$0.72.
There could be better news on the horizon.
Recently, Singapore’s central bank said that it is conducting stress tests on the banks to see if the dividend cap for the lenders that were imposed last year can be relaxed.
Assuming the banks are allowed to pay higher dividends, this will serve as a catalyst for DBS to hike its full-year 2021 dividend.
Mapletree Industrial Trust (SGX: ME8U)
Mapletree Industrial Trust, or MIT, invests in a portfolio of industrial real estate and data centres in both Singapore and the US.
As of 31 March 2021, the REIT’s total assets under management (AUM) stood at S$6.8 million, comprising 87 industrial properties in Singapore and 28 in the US.
For its fiscal year 2021 ended 31 March 2021, MIT reported a strong set of earnings.
Gross revenue rose 10.2% year on year to S$447.2 million, boosted by the acquisition of 14 data centres in the US in June last year.
Net property income (NPI) increased by 10.4% year on year while distribution per unit (DPU) inched up 2.5% year on year to S$0.1255 due to an enlarged base of units.
Moving forward, MIT has continued to boost its data centre exposure with its latest acquisition two months ago, thus ensuring the REIT’s DPU remains resilient.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The group operates a platform for the buying and selling of securities such as stocks, bonds and derivatives.
SGX reported a creditable set of earnings for its fiscal 2021 half-year ended 31 December 2020.
Revenue rose 9% year on year while net profit jumped by 12% year on year to S$240 million.
The bourse operator increased its quarterly dividend from S$0.075 to S$0.08.
The group is well-positioned to grow further and has communicated its plans to grow both its revenue and operating margins in the years ahead.
Frasers Centrepoint Trust (SGX: J69U)
Frasers Centrepoint Trust, or FCT, is a retail REIT that owns 10 suburban malls in Singapore.
FCT’s AUM is around S$6.4 billion as of 31 March 2021 and its portfolio comprises around 2.3 million square feet of retail space.
For its fiscal 2021 half-year, the REIT reported a 73.8% year on year surge in gross revenue.
The increase was mainly due to the addition of properties from the REIT’s acquisition of the AsiaRetail Fund’s portfolio of five malls.
NPI rose by the same quantum, clocking in at S$125.6 million, while DPU surged by 28.4% year on year to S$0.05996.
FCT’s malls are enjoying an uptick in tenant sales as suburban malls remain popular with HDB heartlanders.
For February 2021, tenant sales rose 11.7% year on year, demonstrating a promising rebound from the depth of the pandemic.
Hongkong Land Limited (SGX: H78)
Hongkong Land Limited, or HKL, owns, operates and develops commercial and retail properties in Hong Kong, Singapore, Jakarta and China.
Its portfolio consists of around 850,000 square metres of prime real estate.
The group experienced challenging conditions when the Hong Kong riots broke out in 2019, and the problems were exacerbated by the outbreak of the pandemic early last year.
For its fiscal year 2020, HKL reported an 11% year on year dip in underlying profit.
However, the property giant maintained its total dividend per share at US$0.22 despite the challenges.
The group’s high-quality portfolio positions it well to withstand the downturn, and its healthy free cash flow should ensure the continuation of dividend payments.
If you’re nervous, confused, or worried about buying your first stock, then our latest beginner’s guide to investing can help. It’s easy to read yet packed with valuable insights. Download it for free today, and buy your first stock in the next few hours. Click here to get started.
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Disclaimer: Royston Yang owns shares of DBS Group and Singapore Exchange Limited.
