Dividends are an investor’s best friend.
These payouts act as a reward to shareholders when the company is performing well and represent a tangible return on your investment.
You can choose to spend your dividends whichever way you wish or to reinvest them in the very stocks that paid them out to enjoy long-term compounding.
When it comes to stability, there is no better choice than to park your money in dependable blue-chip stocks.
So, if you like a mix of stability and a consistent yield, you should look for blue-chip stocks that pay out reliable dividends.
If these stocks manage to raise their dividends, you will receive even more cash even if your shareholding remained the same.
We throw the spotlight on three blue-chip stocks that recently upped their dividends.
United Overseas Bank Ltd (SGX: U11)
United Overseas Bank, or UOB, is Singapore’s third-largest bank by market capitalisation.
The lender is enjoying a strong uplift in its net interest income (NII) in line with surging interest rates.
For its recent 2023 first half (1H 2023) earnings, the bank reported a sharp 53% year on year jump in core net profit to S$3.1 billion.
NII surged by 37% year on year to S$4.8 billion as the bank’s net interest margin (NIM) expanded from 1.63% in 1H 2022 to 2.13% in 1H 2023.
UOB hiked its interim dividend by 42% year on year from S$0.60 to S$0.85, representing around 49% of the group’s net profit.
At a share price of S$30.10 and with a trailing 12-month dividend of S$1.60, the bank’s shares offer a trailing dividend yield of 5.3%.
The lender is optimistic for the remainder of 2023 as it is on track to achieve a projected annualised revenue uplift of around S$1 billion from its acquisition and integration of Citigroup’s (NYSE: C) consumer banking franchise in four countries.
The acquisition has concluded in Malaysia, Thailand and Vietnam with integration expected for Thailand and Vietnam by next year.
Indonesia is on track for completion by the end of 2023.
With the US Federal Reserve raising interest rates to their highest level in more than 22 years and with yet another possible rate hike on the cards in September, UOB looks set to enjoy high NIM and NII for the foreseeable future.
Jardine Matheson Holdings Limited (SGX: J36)
Jardine Matheson Holdings, or JMH, is a diversified group owning multiple businesses and property assets.
The group employs more than 425,000 employees and has a wide range of businesses in sectors such as food retailing, health and beauty, property development, transport services, and luxury hotels.
For 1H 2023, revenue remained flat year on year at US$18.3 billion.
However, underlying profit, which strips out one-off and exceptional items, improved by 10% year on year to US$823 million.
As of 30 June 2023, net asset value per share inched up 1% from 31 December 2022 to US$100.
With stronger results, JMH declared an interim dividend of US$0.60, 9% higher than the US$0.55 paid out a year ago.
Together with last year’s final dividend of US$1.60, the trailing 12-month dividend for the diversified group stood at US$2.20, giving its shares a trailing dividend yield of 4.5%.
DFI Retail Group (SGX: D01)
DFI Retail Group, or DFI, is a pan-Asian retailer with more than 10,700 outlets and 218,000 employees as of 30 June 2023.
The group operates several well-known brands such as Giant, Cold Storage, and Guardian across formats such as hypermarkets, supermarkets, health and beauty, and convenience stores.
The business has seen an encouraging recovery amid improved trading conditions in 1H 2023 as the Hong Kong border reopens and footfall increases across all its stores.
Revenue remained flat year on year at US$4.6 billion.
However, DFI reported a turnaround for 1H 2023 with an underlying net profit of US$33 million, reversing the US$52 million net loss in the prior year.
The Health and Beauty division saw a 20% like-for-like sales growth for the half-year but was dragged down by weakness in grocery retail and home furnishings.
Free cash flow for the retail group climbed nearly 28% year on year from US$283.6 million in 1H 2022 to US$362.6 million in 1H 2023.
As a result, DFI tripled its interim dividend to US$0.03, which was similar to the total dividend paid for 2022.
Together with last year’s final dividend of US$0.02, the trailing 12-month dividend adds up to US$0.05, giving its shares a trailing dividend yield of 1.9%.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
