If you’re a long-term investor and you are a fan of buying dividend stocks for your portfolio, then it goes without saying that Singapore is an ideal place to do that.
That’s because the city state has a zero dividend tax withholding rate. That means all investors who are resident here get 100% of the dividends paid out by Singapore-listed companies, including popular income stocks like real estate investment trusts (REITs).
What investors here might not realise is that not all foreign stock markets are like the US, which withholds a substantial 30% of the total dividend paid to foreign shareholders.
One such stock market that’s like Singapore – and has a zero dividend withholding tax – is the UK. London-listed stocks are well known for providing a wide choice of dividend-paying stocks.
With that, here are three dividend stocks (that are part of the UK benchmark FTSE 100 Index) that also yield over 4% for investors.
While Aviva PLC (LSE: AV) may not be a household insurance name in Asia, it’s a powerhouse brand in the UK.
Aviva is one of the UK’s leading wealth, retirement and insurance businesses and serves over 18.5 million customers across its core markets of the UK, Ireland and Canada.
More recently, the company has focused on disposing of “non-core” assets in overseas markets and re-aligning its business to push forward in its core markets where it has a dominant presence as well as synergies.
As a result, Aviva has disposed of all eight of its non-core businesses, with Aviva Vietnam’s sale to Manulife Financial Corporation (TSE: MFC) in November 2021 wrapping up its disposal programme.
That contributed to some strong results in its full-year 2021 results, where it also announced it’s returning a total of £4.75 billion (US$6.22 billion) to shareholders via a buyback programme.
In addition, it plans to raise its full-year dividend in 2022 by a whopping 40% year-on-year to around 31.5 pence per share (see below).
This will be supported by growing solvency as well as targeting expanding cash remittances from continuing operations for the 2022-2024 period.
Based on its current share price of 451p, Aviva shares are offering investors a juicy 12-month trailing dividend yield of 4.9%.
Pharmaceuticals giant GlaxoSmithKline plc (LSE: GSK) needs no introduction to investors. The healthcare behemoth has business interests across pharma, vaccines, and consumer health.
Some of the brand name consumer healthcare brands, such as Panadol and Advil, will be instantly-recognisable to many of us.
However, in it’s the pharmaceuticals business that GlaxoSmithKline, also known as “GSK”, generates most of its revenues.
In fact, its pharma business generated around £17.7 billion in revenue in full-year 2021 – more than 50% of the group’s £34.1 billion in full-year sales.
Meanwhile GSK has also decided to spin off its consumer healthcare business in order to focus on its pharma and vaccines businesses.
GSK plans for the unit – renamed Haleon – to be spun out via a London stock market listing and the company is set to receive a £7 billion dividend from the demerger.
With total free cash flow of £4.4 billion in 2021, GSK is set to continue delivering for dividend investors. At its current price of 1,680p, its shares are yielding a solid 4.9%.
3. United Utilities
Finally, we have United Utilities Group PLC (LSE: UU), a water and wastewater services company that serves the Nort West of England.
It delivers more than 1.8 billion litres of water a day to over 3 million homes and businesses, while also treating a substantial amount of wastewater.
As a utility stock, its services are always in demand – just what you want as a dividend investor. For the first half of fiscal year (FY) 2021/2022 (for the six months to 30 September 2021), United Utilities saw its revenue increase to £932 million, from £894 million in the same period a year earlier.
Its underlying operating profit also rose to £333 million during the latest half-year period, up from £319 million in the year-ago period.
One thing to watch for investors, though, is the company’s net debt which increased slightly over the latest six months to £7.4 billion.
However, this was partially offset by United Utilities responsibly managing its debt load through a mix of fixed, floating and CPI-linked rates.
Given its current share price of 1,084p, United Utilities shares are offering investors a dividend yield of 4.0%.
Look overseas for dividends
As Aviva, GlaxoSmithKline and United Utilities prove, there are ample opportunities for Singapore dividend investors to buy overseas stocks that pay generous dividends.
Many of these can be found in the UK stock market and the fact that there’s absolutely no dividend withholding tax for investors make the proposition even more attractive.
With a truly global portfolio of stocks, investors who rely on dividends for a stream of passive income and can hopefully sleep easier at night.
Disclaimer: ProsperUs Head of Content & Investment Lead Tim Phillips doesn’t own shares of any companies mentioned.
Tim, based in Singapore but from Hong Kong, caught the investing bug as a teenager and is a passionate advocate of responsible long-term investing as a great way to build wealth.
He has worked in various content roles at Schroders and the Motley Fool, with a focus on Asian stocks, but believes in buying great businesses – wherever they may be. He is also a certified SGX Academy Trainer.
In his spare time, Tim enjoys running after his two young sons, playing football and practicing yoga.