I’ve been looking to generate an income stream through the purchase of shares that pay high dividends. After evaluating the pros and cons of buying shares overseas, I decided to concentrate on shares in Singapore. The three main reasons for this are the currency risk factor, foreign taxes and Asia being where the growth is at the moment.
While researching which shares to purchase I stumbled upon the Investment Moats blog which has a handy list of some of the better dividend paying shares in Singapore. The list also includes useful information on important statistics that indicate the listed companies’ ability to keep paying their dividends. I found this very useful to narrow down the companies I would eventually purchase. After all, you probably don’t want to buy a share of a company that is paying dividends out of its cash reserves, or worse, from borrowings.
After doing the research I decided to go with the following companies:
Starhub with a yield of 7.7% is a stable telecommunications company with a record and ability to pay out a very good dividend. I’m kicking myself for not buying this stock when it was around $2.20. I thought the market was going to correct at the time, so I held off.
Singapore Press Holdings with a yield of 6.6% is a media company with a monopoly in Singapore. It has solid earnings and dividends over the years too.
SP Ausnet is a Singaporean power utility company with a yield of 8.2%. It’s main operations are in Victoria, Australia and the stock is listed on the ASX too. Everyone needs power, so this should be a stable earner too.
Singapore Post is another monopoly, but has moved more into the retail side of things to support government/citizen interaction, bill payments, and other financial services. The yield is a bit lower at 5.3%, but this is a fairly defensive play.
There are a couple of other stocks I’m looking at too, but they need a bit more investigation before I commit.
Hopefully the stocks I’ve selected will keep paying the dividends at similar yields over the time I hold them. They are certainly paying a lot more than what my money would get while it’s sitting in the bank!
Disclaimer: The above is my own opinion and not financial advice.
hi louco,
read your post with interest, i too am into dividend paying stocks, i let starhub pass me by as singapore is its only market (unless i got it wrong), and has singtel because it has operations in several countries, the share price isn’t exciting but then i am quite satisfied with the dividend record. i also have sph too, and i bought it at $4.50 several years ago but the dividends has more than cover any losses from the stock price. i too have sp ausnet and i have opted for the dividends to be paid in the form of stock. and i gave up on singpost as they did not increase their dividends for several years. i bought bp when it stock price was hammered down, and they have started paying dividends, and guess what, you too can choose to have your dividends paid in the form of stocks. good luck with your dividends!
I agree, Starhub is a bit risky, given its concentration in the Singapore market. However, looking at the financial results it seems they are able to fund the dividend going forward, so that’s why I stuck with it.
With the turmoil in the Middle East, the shares have taken a bit of a hit, Singtel more than most. I picked up some more Singtel shares at a lower price and this morning Singtel is up 10c, so hopefully it will come back further soon.
I have some concerns with SP Ausnet around the currency risk. If the AU$ dives, then I guess the dividend will go down with it. I bought it anyway because the business looks solid and the dividend is so enticing.
You were brave to get into BP. I know some people who got in, only to find it going down a lot further!
Good luck with yours too!
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