For retirees, consistency of dividend payments is of utmost priority, especially given the rising cost of living and living longer.
The most consistent dividend payors are the businesses with solid cash flows and a proven track record of paying stable dividends, regardless of market cycles.
Today, we spotlight three such businesses for consideration.
What Makes a Stock Retirement-Friendly?
Taking a step back, we have to first consider what makes a stock retirement-friendly.
First, the company should have a sustainable business model, where it either earns recurring income or provides essential, non-cyclical services.
Second, it has to have a history of paying consistent dividends, regardless of market conditions. As a rule of thumb, the business should have a five or 10-year history of either uninterrupted or increasing payouts.
Third, having a solid balance sheet is important. These companies should have low leverage and stable cash flows to maintain or increase dividend payments.
Finally, you want companies that offer predictable growth. This can be through either business expansion to new geographies or new products/services, an ability to raise prices, or through maintaining low costs.
Having said that, let’s introduce the three businesses.
Venture Corporation Limited (SGX: V03) – Robust Balance Sheet Supports Consistent Dividends
First up, Venture Corporation Limited, or Venture, could be a stock to include in your retirement portfolio.
The company has an excellent track record of paying consistent annual dividends.
Over the past 10 years, Venture has never failed to pay an annual dividend.
This is remarkable considering this time frame includes COVID and the high inflation years of 2022-2023.
Despite poor business environments at times (Venture operates in the technology sector and has seen double-digit percentage declines in revenue in three years out of the last decade), the company’s ability to consistently generate positive operating cash flows allows it to pay consistent dividends.
Factor in Venture’s zero debt and a cash position of S$1.3 billion, and the company is well-positioned to keep rewarding shareholders with steady dividends.
With its latest payout, Venture offers a yield of around 5.3%.
However, given Venture’s operations are reliant on global technology spend, investors should monitor such recent trends.
Singapore Exchange (SGX: S68) – A Cash Flow Machine
The only approved financial exchange for Singapore markets, Singapore Exchange or SGX, has paid an annual dividend stretching back to at least 2003.
Rain or shine, SGX continues to generate solid cash flows through the recurring income it earns from the trading of securities and derivatives.
Moving forward, SGX has already stated its intentions to grow its dividend to S$0.0525 per share by the financial year ending 30 June 2028 (FY2028).
Its dividend in FY2025 was S$0.375 per share.
Currently, SGX has a dividend yield of 2.2%.
Given the monopolistic nature of its business and a strong net cash position of S$507 million, we expect SGX to continue its impressive streak of paying a consistent annual dividend.
Parkway Life REIT (SGX: C2PU) – Defensive Health Care
Ending things, we suggest a defensive health care name: Parkway Life REIT or Parkway Life.
Since its listing in 2007, Parkway Life has paid an annual dividend.
This encompasses the great financial crisis, COVID, and the high inflation period of 2022-2023.
Parkway Life has a portfolio of hospitals, medical centres, and nursing homes across Singapore, Japan, France, and Malaysia.
Around 65% of its healthcare assets by value are on triple-net leases with annual escalations.
Simply put, Parkway Life has the ability to raise rents on its tenants.
With its trailing distribution per unit of S$0.1518, Parkway Life offers a yield of 3.7% to shareholders.
Parkway Life’s low gearing of 35.8% and excellent interest coverage ratio of 8.9 mean the REIT is poised to continue its annual dividend-streak.
Healthcare’s demand is likely to continue growing, especially given the trend of an ageing population in many parts of the world.
Putting It All Together
Do not underestimate these companies’ solid defensive yields with their stable long-term growth prospects.
Consistent payout, with low volatility from stable earnings, makes these companies an effective inflation hedge.
Investors holding these names can sleep easy knowing that regardless of market conditions, they are likely to continue paying dividends.
Get Smart: Safety and Reliability in Dividend Payments Ensure a Worry-Free Retirement
In conclusion, companies eligible for a spot in your retirement portfolio should provide a reliable payout over the course of many years.
Their long-term growth potential also provides comfort that their dividends should be maintained for years ahead.
With these stocks, you can enjoy a stress-free retirement.
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Many Singapore stocks fall behind inflation, which means your money quietly loses strength over time. Dividend stocks have a very different track record. Some continued delivering 6% to 13% every year across the toughest market conditions.
In this FREE report, discover 5 crisis-tested dividend stocks that kept rewarding investors while the market struggled. Download your dividend investing guide now.
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Disclosure: Wilson.H does not own shares in any of the companies mentioned.
