The idea of receiving dividends over years or even decades is enticing.
Not only can such a consistent income stream boost your retirement earnings, but rising dividends also signify an increasing flow of passive income as time goes by.
Income-seeking investors will be thrilled to know that there are many businesses with a long dividend-paying track record.
However, the key is to focus on the company’s future and not just look back at its past.
Businesses that are strongly positioned within their industry and enjoy growth tailwinds ensure that dividends can continue to be paid year after year.
And these are the types of businesses that you’d want to hold on to for dear life.
Here are five dividend-paying Singapore stocks that I never plan to sell.
DBS Group (SGX: D05)
Many investors are familiar with DBS being one of Singapore’s three largest local banks.
But, did you know that the lender also has a stellar track record of dividend payments?
The group continued paying dividends even through the global financial crisis back during 2008-2009 and started increasing its annual dividends from the fiscal year 2015 (FY2015).
Investors will be pleased to know that DBS has demonstrated resilience during this pandemic by reporting a record-high S$2 billion net profit for its recent fiscal 2021 first-quarter earnings.
Dividends, however, were reduced from S$0.33 per quarter to S$0.18 in 2020’s second quarter as the Monetary Authority of Singapore called on banks to be prudent and limit their dividend payments.
There is good news for DBS shareholders, though.
Just last week, the central bank announced that these dividend restrictions will be lifted, paving the way for DBS to possibly restore its dividend payments to the 2019 level.
Boustead Singapore Limited (SGX: F9D)
Boustead Singapore Limited, or BSL, is an engineering conglomerate with four key divisions — energy-related engineering, real estate solutions, geospatial technology, and healthcare.
The group has an impressive track record of paying out twice-yearly dividends, and have done so for more than a decade.
The good news is that BSL’s real estate division, Boustead Projects Limited (SGX: AVM), recently announced the setting up of a private investment fund called Boustead Industrial Fund, or BIF.
The setting up of this fund acted as a catalyst for the group to realise the market value of its leasehold property portfolio, allowing it to book its highest-ever net profit of S$113.1 million for the fiscal year ended 31 March 2021.
As a result, BSL declared a final dividend of S$0.03 per share and a special dividend of S$0.04 per share.
Along with the interim dividend of S$0.01, this marks the highest level of dividends paid out by the group.
Moving forward, BSL will make use of BIF to recycle its assets, and the group should be able to carry on paying out a healthy level of dividends.
NetLink NBN Trust (SGX: CJLU)
NetLink NBN Trust designs, builds, owns and operates the passive fibre network of Singapore’s next-generation nationwide broadband network (NBN).
This network provides internet coverage to residential homes and corporations in Singapore.
Since its IPO in 2018, NetLink NBN Trust has provided stable distributions to unitholders, with the most recent distribution being S$0.0508 for the fiscal year ended 31 March 2021.
The trust owns a fiber network that connects over 1.4 million residential users and 48,000 non-residential users.
There is a low risk that these distributions will not continue as NetLink is the main fibre network provider in Singapore that the telecommunication companies tap on.
Micro-Mechanics (Holdings) Ltd (SGX: 5DD)
Micro-Mechanics, or MMH, designs and manufactures high-precision tools and parts used in the semiconductor industry.
The group has five manufacturing facilities in Singapore, Malaysia, China, the Philippines and the US.
MMH has been paying steady dividends since its fiscal year 2006, and this dividend has gradually increased over the years as the group’s business improved.
For its fiscal year 2020 ended 30 June 2020, the group paid a total of S$0.12 in dividends comprising S$0.05 interim, S$0.05 final and S$0.02 special.
In the nine months ended 31 March 2021, MMH posted a sturdy set of earnings, with revenue up 14.1% year on year to S$47.8 million and net profit jumping by 24% year on year to S$13.3 million.
Its interim dividend was bumped up to S$0.06 from S$0.05 a year ago.
With semiconductor sales forecast to remain healthy as demand for smartphones and laptops surged during the pandemic, MMH should continue to do well in the foreseeable future.
Keppel DC REIT (SGX: AJBU)
Keppel DC REIT is a data-centre-focused REIT that owns a total of 19 data centres as of 30 June 2021.
The REIT has been paying out steadily increasing distribution per unit (DPU) since it went public in December 2014.
As demand for data storage surged due to the pandemic and proliferation of electronic devices, the REIT witnessed healthy demand for its properties
For its fiscal 2021 first half ended 30 June 2021, gross revenue increased by 9% year on year while DPU increased by 12.5% year on year to S$0.04924.
The REIT recently announced the acquisition of its first data centre in Guangzhou, China. When completed, the transaction will bump up the REIT’s data centres to 20.
End-user spending on public cloud services is projected to grow by 23.1% this year, leading to continued demand for data centres.
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Disclaimer: Royston Yang owns all the companies mentioned.
