Dividends are attractive because they represent a tangible return on your investment that flows straight into your bank account.
Income investors have a great selection of dividend-paying stocks they can choose from on the local bourse.
The key is not just looking for stocks that pay out consistent dividends.
You also need to determine if they have the potential to increase their payout over time.
We highlight five Singapore stocks that look well-positioned to increase their dividend payments as we head into 2025.
iFAST Corporation Limited (SGX: AIY)
iFAST Corporation is a financial technology company that operates a platform for the buying and selling of unit trusts, equities, and fixed income.
The fintech reported strong earnings for the third quarter of 2024 (3Q 2024).
Net revenue climbed 53.4% year on year to S$64 million while operating profit soared 92.4% year on year to S$21.5 million.
Net profit for the quarter came in at S$16.8 million, up 97% year on year.
iFAST reported that its assets under administration (AUA) hit a record high of S$23.62 billion as of 30 September 2024, driven by healthy net inflows of S$2.3 billion for the first nine months of 2024.
The group raised its third interim dividend by 15.4% year on year from S$0.013 to S$0.015.
iFAST believes that its Hong Kong ePension division will be an important growth driver for 2025 while its overall wealth management platform should show healthy progress.
Its digital bank division will also be an important growth driver next year.
Should these two divisions post higher profits, there is a high chance that iFAST can continue to raise its dividends.
Keppel DC REIT (SGX: AJBU)
Keppel DC REIT is a data centre REIT with a portfolio of 23 data centres spread across 10 countries.
The REIT’s assets under management stood at S$3.9 billion as of 30 September 2024.
Keppel DC REIT delivered a resilient performance despite the twin headwinds of high inflation and interest rates.
3Q 2024 saw gross revenue rise 8.9% year on year to S$76.9 million as the REIT’s top line benefitted from strong positive rental reversions and the contribution from its newly-acquired Tokyo data centre.
Net property income, however, dipped by 0.2% year on year, impacted by loss allowances from the REIT’s Guangdong data centres.
Distribution per unit (DPU) crept up 0.4% year on year to S$0.02501, aided by a 58% year-on-year jump in finance income.
Just last week, Keppel DC REIT announced a major acquisition of two data centres in Singapore from its sponsor Keppel Ltd (SGX: BN4).
This transaction will rely on equity fundraising and debt financing and is projected to lift the REIT’s first half 2024 DPU by 8.1% from S$0.04549 to S$0.0492.
These data centres also have the potential for rental uplift as prevailing rental rates are higher than the contracted rental rates.
Azeus Systems (SGX: BBW)
Azeus Systems is a provider of software products and services.
The group’s flagship product, Convene, is a paperless meeting solution adopted by clients in more than 100 countries.
Azeus reported an upbeat set of earnings for its first half of fiscal 2025 (1H FY2025) ending 30 September 2024.
Revenue rose 27% year on year to HK$169.3 million while gross profit jumped 36% year on year to HK$123.3 million.
Net profit surged 79% year on year to HK$48.9 million.
The business declared an interim dividend of HK$1.60, 77% higher than the HK$0.90 paid out a year ago.
CEO Michael Yap is optimistic about Azeus’ 2025 prospects.
The group will invest in its new product line – the ESG reporting platform and also expects its CERKS contract (which has entered the deployment phase) to contribute further to its top and bottom lines.
He expects continued growth in 2H FY2025 and if Azeus reports higher profits, it may declare a higher final dividend than the HK$1.90 that was paid out in FY2024.
ComfortDelGro Corporation Ltd (SGX: C52)
ComfortDelGro Corporation, or CDG, is a land transport giant with a fleet of 40,000 buses, taxis, and rental vehicles.
The group also operates 210 km of rail network in operation and under development.
CDG reported a strong set of earnings for 3Q 2024.
Revenue increased by 18.4% year on year to S$1.2 billion while operating profit shot up nearly 22% year on year to S$91.8 million.
Net profit stood at S$57.5 million for the quarter, up 15.2% year on year.
The land transport company had already raised its 2024 interim dividend by 21.4% year on year from S$0.029 to S$0.0352.
Its recent acquisition of Addison Lee Group in the UK will help CDG to increase its presence in the premium market.
The purchase is also in line with the group’s strategy to expand its point-to-point mobility portfolio.
Should CDG continue to grow its earnings, it may pay out a higher final dividend for 2024.
SATS Ltd (SGX: S58)
SATS is one of the world’s largest providers of air cargo handling and airline catering services.
The group also reported a sparkling set of earnings for 1H FY2025.
Revenue rose 14.8% year on year to S$2.8 billion while net profit came in at S$134.7 million, reversing the prior year’s net loss of S$7.8 million.
SATS also reinstated its interim dividend by declaring a S$0.015 dividend for 1H FY2025.
The group expects the positive momentum to carry on in the next quarter as the travel season nears its peak.
SATS will also improve its operating efficiency and introduce new product offerings.
If the business continues to do well, the group may declare a higher dividend than the final dividend of S$0.015 that was paid out for FY2024.
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Disclosure: Royston Yang owns shares of iFAST Corporation and Keppel DC REIT.
