Dividends are an investor’s best friend.
Not only do they put cash in your bank account, but they also represent a tangible return on your investment that is independent of the share price.
Luckily, the Singapore stock market is an abundant source of dividend-paying stocks.
That said, investors need to tease out the companies that are consistent payers of dividends and have the bandwidth to increase their payouts in future.
We feature four stocks that have paid out consistent dividends that you may wish to include in your buy watchlist.
DBS Group (SGX: D05)
DBS is Singapore’s largest bank by market capitalisation.
The lender has been a stalwart through tough times and pays out a quarterly dividend, the only bank within the trio of local banks to do so.
DBS released a stellar set of earnings for its third quarter 2023 (3Q 2023).
Total income rose 16% year on year to S$5.2 billion as high-interest rates provided a boost to the bank’s net interest income.
Net profit for DBS also climbed 16% year on year to S$2.6 billion.
The blue-chip lender paid out a quarterly dividend of S$0.48 per share, 33% higher than the S$0.36 paid a year ago.
The bank has been a steady payer of dividends even through the pandemic when Singapore’s central bank called on all banks to reduce their dividends.
It even paid out a special dividend of S$0.50 last year to reward shareholders.
Looking ahead, DBS has communicated during its Investor Day that it can sustain a baseline increase in dividends of S$0.24 per year barring unforeseen circumstances.
UMS Holdings Ltd (SGX: 558)
UMS is a one-stop shop providing equipment manufacturing and engineering services to original equipment manufacturers (OEMs) of semiconductors and related products.
For the first nine months of this year (9M 2023), UMS reported a downbeat set of earnings with revenue falling 17% year on year to S$226.4 million.
Net profit tumbled by 46% year on year to S$44.3 million, in line with the slump in the semiconductor industry.
Despite the fall in profits, UMS generated positive free cash flow of S$26.5 million for 9M 2023, a slight increase from the S$26.2 million in the prior year.
The group also upped its interim dividend to S$0.012 from S$0.01.
UMS has been paying consistent quarterly dividends and the latest increase demonstrates management’s confidence in the sector.
The group expects a buoyant outlook with better days ahead supported by positive guidance by key semiconductor equipment manufacturers.
iFAST Corporation Limited (SGX: AIY)
iFAST is a financial technology firm that operates a platform for the buying and selling of unit trusts, equities, and bonds.
The group announced a sparkling set of earnings for 3Q 2023 as it quadrupled its year-on-year net profit to S$8.5 million.
iFAST’s assets under administration (AUA) also hit a new record high of S$19.12 billion as of 30 September 2023.
The fintech has been a consistent payer of dividends, with 2019’s annual dividend coming in at S$0.0315.
This dividend has steadily increased over the years, culminating in an annual dividend of S$0.048 for both 2021 and 2022.
Moving forward, iFAST CEO Lim Chung Chun believes that 2024 will have room for dividend increases as net profit is poised to “substantially increase”.
The group’s Hong Kong ePension division made its maiden, one-month contribution for 3Q 2023.
iFAST expects 2023’s profit to be substantially higher than 2022 and for 2024’s revenue and profitability to show “robust growth”.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The group enjoys a natural monopoly and is in the process of morphing into a multi-asset exchange to cater to a wider group of clients.
The exchange has a stellar record of dividend payments with its fiscal 2003 (FY2003) seeing an annual dividend of S$0.051.
Over the past two decades, the dividend per share has risen to S$0.325 for FY2023 ending 30 June 2023.
For its latest fiscal year, SGX saw revenue rise 8.7% year on year to S$1.2 billion while net profit (adjusted for one-off and exceptional items) increased by 10.3% year on year to S$503.2 million.
The bourse operator also put a smile on income investors’ faces by increasing its quarterly dividend from S$0.08 to S$0.085, bringing its annualised dividend to S$0.34 for FY2024.
Management sees good opportunities to grow the business further and to build a fully integrated and scalable foreign exchange platform to attract more participants.
The group will also widen its partnerships and collaborations with other exchanges to introduce new products such as Singapore Depository Receipts, or SDRs.
SGX is targeting to increase its dividend per share by a mid-single-digit % compound annual growth rate.
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Disclosure: Royston Yang owns shares of DBS Group, iFAST and the Singapore Exchange.
