Is now the time to build a strong dividend portfolio with SGX stocks?

When it comes to passive income, most investors tend to think that is only possible with a huge war chest of funds, or look towards buying a second property to earn rental income. What’s important to know is that there are other, and even better alternatives for investors to consider to grow their passive income stream – that is easily at reach to most. 

Take our local bourse, SGX, for example. Well-known for its composite of stable blue-chip companies, SGX has been extra popular with investors who are looking to build a portfolio of stable business that gives out good dividends. 

Most recently, Singapore stocks have had a bumper 2-weeks of great results and enhanced dividend distribution. 

Because building a passive income stream with strong dividend stocks is like having a side hustle without the actual hustling, it’s worth paying attention to the ways we can do so successfully! 

Here are some of the top dividend stocks to consider for your portfolio:

DBS Group Holdings Limited (SGX: D05)

Household brand DBS Bank is a multinational banking and financial services corporation headquartered in Singapore. It’s almost hard to find someone in Singapore who hasn’t heard of or banked with the bank. But beyond Singapore, DBS has a strong presence in the Asia region, especially in Hong Kong, Taiwan, Indonesia, China and India with over 280 branches and over 1,000 ATMs. 

Most recently, the bank posted record-breaking results for FY2022, with net profit of S$8.19 billion, 20% higher y-o-y, due to rising interest rates thereby boosting interest income. In 4Q2022 alone, the bank’s net profit surged 69% y-o-y to S$2.34 billion, which was a quarterly record. 

Given the result, a special dividend of 50 Singapore cents a share for the period will take the year’s total payout to S$2 a share, compared to S$1.20 in FY2021. 

UOB Limited (SGX: U11)

Another beneficiary of the global rising rates environment is homegrown banking stalwart UOB which announced a 37% increase in quarterly core profit. This brought the bank’s total earnings for FY2022 to S$4.57 billion, 12% higher y-o-y which is also a record for UOB. 

The bank has recommended a final dividend of 75 Singapore cents a share, bringing its total dividend for FY2022 to S$1.32 a share, compared to S$1.20 in FY2021.

Despite being the smallest listed bank in Singapore, UOB acquired Citigroup’s consumer business for about S$5 billion in Malaysia, Thailand, Indonesia and Vietnam, doubling its retail customer base to 7 million, and making it one of the top stocks to watch in 2023.

UOB’s CEO Wee Ee Cheong has said that the Citi portfolio acquisition will be a main growth driver in 2023, given that its performance had already surpassed expectations. 

Genting Singapore Limited (SGX:G13)

With revenge travel back in full-force and Singapore international tourist arrivals at record levels, players such as Genting Singapore Limited have staged a significant recovery from the pandemic era. 

Genting’s net profit for 2H2022 more than doubled to S$1.1 billion, as a result of increased gaming and non-gaming revenue, up from S$512.5 million in H2 2021. Total net profit was also up 85% y-o-y.

Genting’s gaming revenue comes from the casino operations it runs at Resorts World Sentosa (RWS) and non-gaming revenue from their hospitality business such as hotels, restaurants, as well as the well-known Universal Studios Singapore (USS) theme park and more. 

Exciting times are ahead as Genting Singapore is also undertaking an ambitious expansion plan for RWS – referred to as RWS 2.0 – focusing on enhancing mainly the Singapore Oceanarium experience and Minion Land at USS.

A final dividend of 2 Singapore cents a share was proposed for the year, bringing total FY2022 dividends to 3 Singapore cents a share vs 1.51 Singapore cents a share in FY2021. 

SembCorp Industries Limited (SGX:U96)

For their latest results, Singapore’s Sembcorp Industries reported a 54% growth in y-o-y for 2HFY2022, of S$358 million. Which brought the group’s earnings to S$848 million for FY2022, up 204%. 

What does Sembcorp Industries do exactly and what was the key driver of its revenue growth last year? 

Sembcorp Industries and the other stocks highlighted above are a component of the Straits Times Index, a market capitalisation weighted index that tracks the performance of the top 30 companies listed on SGX. 

Its core businesses include utilities, marine and urban development, and the company operates power and water plants, provides engineering and construction services for offshore and marine projects, and develops sustainable urban solutions. 

Globally, energy stocks experienced strong growth in 2022 due to the rise in crude oil prices and the increased realisation of the importance of fossil fuels in the wake of Russia’s invasion of Ukraine. 

As a result, in 2022, Sembcorp’s renewables and conventional energy segments led the y-o-y growth with the renewables segment reaping a net profit growth of 100% y-o-y to S$64 million while conventional energy surged by 96% y-o-y to S$369 million. 

The total dividend proposed for FY2022 was 12 Singapore cents a share vs 5 Singapore cents a share in FY2021. 

How to invest in DBS, UOB, Genting and Sembcorp Industries 

If you’re keen to up your dividend game and seize the opportunities highlighted above, you can invest in these companies through a brokerage platform such as Syfe Trade which offers access to both Singapore and US markets.Syfe Trade is an easy and low-cost option for Singapore stock investing. Pricing for SGX stocks is just 0.06% of traded value (minimum S$1.98), and there are no platform and withdrawal fees.

Disclaimer: This article is for informational purposes only and should not be viewed as financial advice. It is not meant to market any specific investment, or offer or recommend the purchase or sale of any specific security. All forms of investments carry risks, including the risk of losing all of the invested amount. Such activities may not be suitable for everyone. This advertisement has not been reviewed by the Monetary Authority of Singapore.

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