Income investors constantly search for stocks that pay out dividends to increase the amount of passive income they receive.
Luckily, the Singapore Stock Exchange has a myriad of stocks that pay out consistent dividends.
Investors get to pick and choose from a wide range of blue-chip stocks, REITs and smaller dividend-paying stocks to construct their investment portfolios.
You may be on the lookout for companies that not only pay dependable dividends but also sport a high dividend yield.
Most importantly, this high yield should be sustainable and not just a flash in the pan.
We lined up four stocks that sport dividend yields of 5.6% or better that we believe are sustainable.
DBS Group (SGX: D05)
DBS needs no introduction, being the largest of the three Singapore banks by market capitalisation.
The bank reported a solid set of earnings for its fiscal 2023 first half (1H 2023), buoyed by higher interest rates that lifted its net interest income (NII).
NII surged 61% year on year to S$7 billion in 1H 2023 as the group’s net interest margin leapt from 1.52% to 2.14% over the same period.
DBS’s net profit climbed 44% year on year to S$5.2 billion.
The lender raised its quarterly dividend from S$0.36 in 1H 2022 to S$0.48 in line with the good results.
Based on the annualised dividend of S$1.92, DBS shares offer a prospective dividend yield of 5.8%.
CEO Piyush Gupta sees an upside bias to net interest margins and this may come to pass as the US Federal Reserve signals that it may continue raising rates to combat inflation.
He has also indicated that both China and India are promising locations for the bank to expand its business in the coming years.
Venture Corporation Limited (SGX: V03)
Venture is a provider of technology products, services, and solutions.
The group serves clients in industries such as life sciences, genomics, and medical devices, to name a few, and employs more than 12,000 staff.
1H 2023 saw the group report a downbeat set of earnings because of the cyclical downturn in the semiconductor industry.
Revenue slipped 11.9% year on year to S$1.6 billion while net profit declined by nearly 20% year on year to S$140 million.
Despite the weaker numbers, Venture maintained its interim dividend of S$0.25.
Coupled with last year’s final dividend of S$0.50, the trailing 12-month dividend stood at S$0.75, giving Venture’s shares a trailing dividend yield of 6.2%.
The good news is that Venture’s free cash flow for 1H 2023 catapulted more than five-fold year-on-year to S$229.4 million.
The group will focus on capturing more market share and it reported that new product introduction activities have gained traction.
Civmec Ltd (SGX: P9D)
Civmec is an integrated, multi-disciplinary construction and engineering services provider operating in Australia.
The group’s capabilities include heavy engineering, shipbuilding, and site civil works, among others.
For its fiscal 2023 (FY2023) ending 30 June 2023, revenue inched up 2.7% year on year to A$830.9 million.
Net profit increased by 13.7% year on year to A$57.7 million.
Operating cash flow more than tripled year on year to A$122.8 million and Civmec raised its final dividend from A$0.02 to A$0.03.
The total dividend for FY2023 came up to A$0.05, giving the engineering firm’s shares a historical dividend yield of 5.6%.
Civmec also grew its order book by 10.6% year on year to A$1.1 billion.
The group intends to gain further accreditations and grow its market share in large-scale infrastructure projects.
It also believes it is poised to capture demand from future government expenditure in the defence sector.
CSE Global Ltd (SGX: 544)
CSE Global is a systems integrator that provides automation and communications & security solutions across different industries.
It has a presence in 16 countries with 57 offices and employs more than 1,800 employees globally.
For 1H 2023, revenue jumped 33.2% year on year to S$349.3 million with gross profit improving by 31.6% year on year to S$95.8 million.
Net profit more than doubled year on year to S$11 million.
The group paid out an interim dividend of S$0.0125, unchanged from a year ago.
Together with last year’s final dividend of S$0.015, CSE Global’s trailing 12-month dividend stood at S$0.0275.
Shares of the engineering firm yield 6.3%.
The group received new orders of S$391 million in 1H 2023, bringing its order book to S$521.8 million as of 30 June 2023.
Acquisition remains a key growth strategy for CSE Global and management is looking for complementary areas such as the energy and infrastructure segments.
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Disclosure: Royston Yang owns shares of DBS Group.
