Interest rates globally are at all-time lows and it’s unsurprising to see that investors are keen on buying dividend stocks as a form of passive income.
That’s particularly true in Singapore, where dividend income from stocks is tax free. That’s a massive incentive to invest in dividend-paying stocks for the long term.
Of course, there are lots of other reasons why dividend stocks make sense. With money sitting in the bank earning literally nothing, it’s a bigger risk not to invest right now.
Given that, it’s easy to understand why sticking money you won’t need in the next five years into a dividend-yielding stock so you can earn a decent return.
One question, though, we don’t tend to ask when we invest in dividend stocks is; how often does the stock pay its dividend?
For a lot of companies listed on SGX, the dividend is paid twice a year. But if you’re reinvesting dividends, it’s preferable to actually receive your dividends every quarter (so four times a year).
With that in mind, here are four Singapore dividend stocks that pay out to shareholders every three months.
1. Singapore Exchange
Speaking of the SGX, the sole operator of Singapore’s stock exchange is Singapore Exchange Limited (SGX: S68).
It has been a stalwart of the stock market since its listing in Singapore in November 2000. At the time, it was only the third stock exchange operator in Asia-Pacific (after Australia’s ASX and Hong Kong’s HKEx) to list its shares.
Over the years, Singapore Exchange has managed to carve out a niche as a leading operator for markets in derivatives, currencies and commodities trading.
Although its capital markets capabilities lag rivals such as Hong Kong Exchanges and Clearing Ltd (SEHK: 388), its financial performance has allowed it to either maintain or grow its dividend over the years.
Its adjusted earnings per share (EPS) for FY 2021 (for the 12 months ending 30 June 2021) came in at 41.8 Singapore cents.
While this was down about 7% year-on-year, Singapore Exchange still managed to raise its full-year dividend per share (DPS) by 7%.
It announced a DPS of 8.0 Singapore cents for the fourth quarter of FY 2021 and, based on its current share price, Singapore Exchange shares are yielding 3%.
2. DBS Group
Second on the list of dividend stocks that pay out quarterly is leading local bank DBS Group Holdings Ltd (SGX: D05).
DBS had a very impressive quarter in its latest earnings report. Its first-half 2021 net profit was up 54% year-on-year to S$3.71 billion while its loans portfolio increased 6% year-on-year in the first half of 2021.
That’s an impressive rate of growth given the lacklustre recovery in the broader Asia region from the Covid-19 pandemic.
While first-half 2021 expenses were up 3% year-on-year, DBS’s cost-income ratio (its costs as a percentage of profits) was at a very respectable 42%.
That contributed to the solid earnings outlook that DBS has for the second half of 2021. Its dividend was reinstated at a level of 33 Singapore cents for its latest quarter, after the MAS removed the dividend cap it has imposed on local banks last year.
With shares trading at just over S$30.70, DBS offers income investors a 12-month forward dividend yield of 4.3%.
3. iFAST Corporation
Finally, there’s iFAST Corporation Ltd (SGX: AIY), a market-leading online funds platform provider. Not traditionally associated with dividends, investors may be surprised it actually pays one at all.
One of the biggest attractions about iFAST has been its phenomenal growth in China as the country opens up its wealth management industry to foreign competition.
The company’s first-half 2021 results illustrated why investors are so keen on the stock. Revenue for iFAST expanded by 37.8% year-on-year in the first six months of 2021 to S$77 million.
Meanwhile, return on equity (ROE) was a whopping 28% in the first half of 2021. That compared to an ROE of 21.8% for the whole of 2020.
As a result of its impressive performance, EPS was up 907% year-on-year to 3.02 Singapore cents. This allowed iFAST to hike its overall dividend in the first half by 40% year-on-year to 1.50 Singapore cents.
Based on iFAST’s current share price of S$8.76, shares are not yielding much at just 0.3% on a 12-month forward basis.
However, the growth of that dividend, and the fact that iFAST pays out four times a year, could appeal to dividend growth investors.
Consistent payouts
For long-term investors, it’s important to take note of the growth and sustainability of dividend as well. Yet we would be remiss to not be cognisant of how often a company pays out its dividend.
By paying out dividend quarterly, stocks like the ones above can give Singapore dividend investors the chance to reinvest that income on a more frequent basis. That’s something that all dividend investors should applaud.
Disclaimer: ProsperUs Head of Content Tim Phillips owns shares in DBS Group Holdings Ltd.
