2023 Best Dividend Stocks in Singapore

Investing wisely is like finding a sweet spot between taking calculated risks and reaping the rewards. 

When it comes to the best dividend stocks in Singapore, 2023 has been a year of pleasant surprises – defying expectations amidst the uncertain economic climate. 

According to The Business Times, record dividends are expected for Singapore’s largest stocks this year. This is mostly driven by the strong growth in the banking sector in Q3 2023. 

As we close off this dynamic year, let’s explore 2023’s four best dividend stocks in Singapore.

What to look out for in dividend stocks?

Before we dive into Singapore’s top dividend stocks, let us briefly define what makes them the “best” in our opinion. We analyse factors such as dividend yield, payout ratio, and share price performance over the past 12 months.

  • Dividend Yield is a percentage that indicates how much dividend is earned per dollar invested. While a higher yield is attractive, we also consider a company’s long-term profitability and consistent track record of dividend growth. Stable, profitable companies are more likely to weather economic storms and keep paying dividends.
  • Payout Ratio shows how much of a company’s profits go to dividends. A low payout ratio suggests that the company has room to increase dividends in the future. To dig deeper, we also take into account the stock’s debt-to-equity ratio. A low debt-to-equity ratio shows that the company is financially healthy and can afford to pay dividends consistently.
  • Share Price Performance A stock’s price performance is important because it reflects how well the company is doing based on its overall health and growth potential. To assess a company’s long-term viability, we also analyse its profitability and debt levels.

2023 Best Dividend Stocks in Singapore

1. DBS Group Holdings (SGX:D05)

As the largest bank in Singapore and Southeast Asia, DBS Group Holdings is a linchpin of our financial landscape. 

Despite economic challenges in 2020 due to the pandemic, DBS stood firm by giving out regular and growing dividend payments. 

The recent impact on DBS’ ATM service disruptions has resulted in MAS penalties that include a six-month pause on the bank’s non-essential activities while it restores its system resilience. Despite the impact, analysts said the penalties have a limited impact and won’t set the bank back.

In the latest update, DBS reported a net profit of S$2.59 billion for Q3 2023 and declared a dividend of S$0.48 per share. This further emphasises its commitment to rewarding investors.

Source: Syfe; DBS; The Business Times. As of (published date).

2. United Overseas Bank Ltd (SGX:U11)

Though smaller in scale, UOB has positioned itself as a significant player, especially after acquiring Citigroup’s consumer business for about S$5 billion in Malaysia, Thailand, Indonesia, and Vietnam. This doubles its retail customer base to over 7 million, making it one of the key players to watch in the coming future.

Despite global uncertainties, UOB reported a net profit of S$1.42 billion in Q2 2023, declaring an interim dividend of S$0.85 per share, a notable increase from the previous year.

Source: Syfe; UOB; The Straits Times. As of (published date).

3. Oversea-Chinese Banking Corporation (SGX:O39)

With a robust global presence, OCBC embarked on a rebranding journey in July, aiming to generate an incremental S$3 billion in revenue over the next three years. 

The bank has also reported recent initiatives including its acquisition for Indonesia’s Bank Commonwealth, roll-out of a new generative AI chatbot to enhance productivity, and investment in staff development.

In Q3, it reported a robust 21.4% surge in profits, reaching S$1.8 billion, a notable increase from the previous year’s S$1.5 billion. Concurrently, the bank declared a S$0.40 interim dividend.

Source: Syfe; OCBC; The Business Times. As of (published date).

4. Singapore Telecommunications (SGX:Z74)

As a telecommunications giant majority-owned by Singapore’s government, Singtel has maintained a stable dividend policy. 

Despite its recent share price hitting a 52-week low, the telco has big plans to grow its core business, targeting a double-digit return on invested capital in the mid-term.

With a diverse investment portfolio across the region, Singtel reported an 82.6% increase in H1 profit at S$2.1 billion. The company declared a final dividend of S$0.052 per share, providing shareholders with a reliable income stream.

Source: Syfe; Singtel; The Straits Times. As of (published date).

How to decide which dividend stock to buy (and hold)?

2023 so far has promised exciting opportunities for investors in Singapore’s dividend stocks. Investing in dividend stocks requires finding a careful balance between stability and growth. You should consider your investment objectives based on payout and price return expectations and do a thorough research before investing. 

Net ProfitsCurrent Share PriceDividends Per ShareTrailing Dividend Yield
*Net profit data based on Q2 2023 numbers for UOB & OCBC, Q3 2023 for DBS, H1 2023 for Singtel. Net dividend amount per share of the most recently announced. A trailing twelve month dividend yield is used. 
Source: Syfe; SGX; Yahoo Finance; Morning Star, 27 November 2023 

How to invest in dividend stocks in Singapore?

Syfe has a brokerage offering in which you can access dividend stocks as well as other securities on SGX. Commission fees starting at S$1.98 or 0.06% of traded value. Alternatively, if you’re looking to buy into a basket of these four securities, STI ETFs can be an easy access option to access the broader Singapore market.

Making a new year investment resolution in 2024? Explore an array of global and Singapore’s dividend stocks when you download the Syfe app here.

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