Income investors will look out for solid and dependable stocks that is able to grow their dividends consistently. These are businesses that generate consistent and growing profits which will then be able to pay out a portion of it as dividends to shareholders.
It is even better if a company can pay dividends that grow over time. We highlight 3 Singapore stocks poised to pay out higher dividends.
Multi-Chem Ltd
Multi-Chem, through the M.Tech Group, engaged in the distribution of IT products since 2002. The M.Tech Group is a leading regional cyber security and network performance products value added distributor.
This is the main business for the Group and contributes more than 99% of the Group’s revenue.
Multi-Chem reported revenue increase by 7% to S$654.4 million for the full ended 31 Dec 2023. Net profit increase by 36% to S$27.1 million. The company declared a final dividend of 15.50 cents per share bringing total dividend to 24.30 cents for the full year.
This represent a whopping increase of 37% in dividends compared to year 2022. The dividends declared represents a dividend payout ratio of 81% which is still within a comfortable range.
Multi-Chem has been increasing its dividends since 2016 and given its comfortable dividend payout ratio and net cash position, Multi-Chem is definitely one of the 3 Singapore stocks poised to pay out higher dividends. You can view the company website here.
Oiltek International Ltd
Oiltek International Limited is an established integrated process technology and renewable energy solutions provider in the vegetable oils industry, providing solutions that cater to all types of vegetable oils, including palm oil, soybean oil and rapeseed oil.
I first mentioned Oiltek in my article dated 20 Feb 2024. Did anyone buy the stock? Congratulations if you did! Oiltek share price has risen more than 50% year to date. Not many bloggers or even analysts mentioned about this company!
Oiltek reported revenue increase by 22.8% to RM201.1 million for the full year ended 2023. Net profit after tax increase by 50.9% to RM19.1 million. The company declared a final dividend of 1.6 Singapore cents which is higher than 2022 dividend of 1.2 Singapore cents.
The company has a strong balance sheet with no borrowings. Dividend payout ratio is also very low at 41.7%. Oiltek reported in a recent media release that the company has has secured new contracts worth a total of approximately RM94.8 million from Malaysia and Indonesia.
This bring the company total order book to approximately RM400.5 million, which is a new record high. Hence, with no borrowings, low dividend payout ratio and record order book, Oiltek is one of the 3 Singapore stocks poised to pay out higher dividends.
You can view the company website here.
DBS Group Holdings Ltd
DBS is a leading financial services group in Asia with a presence in 19 markets. DBS is in the three key Asian axes of growth: Greater
China, Southeast Asia and South Asia.
DBS reported first-quarter 2024 net profit rises 15% to S$2.96 billion while return on equity increases to 19.4%, both at new highs. Total income grew 13% to a new high of S$5.56 billion as net interest margin was stable at 2.14%.
Fee income crossed S$1 billion for the first time and treasury customer sales reached a record. DBS declared an interim dividend of 54 cents per share which is higher than the 38 cents per share declared in first quarter 2023.
DBS has been increasing its dividend person since 2019. DBS has mentioned that annualised ordinary dividend going forward will be $2.16 per share over the enlarged share base. This represent a dividend yield of about 6% which is even better than some REITs.
Given DBS record profit and the CEO is optimistic that total income and earnings will be better than previously guided, DBS is definitely one of the 3 Singapore stocks poised to pay out higher dividends. You can view the company website here.
Conclusion
These are the 3 Singapore stocks poised to pay out higher dividends. Investors need not always look for REITs or blue chip stocks for dividend income.
There are small-cap gems out there that give out consistent higher dividends too. However, investors need to do their due diligence before investing in these stocks.
