Mutual Fund Singapore 02

18 Blue Chips with 5% Dividend Yield and more

Alvin Chow
Alvin Chow

The Straits Times Index (STI) component stocks are essentially blue chips.

I was quite taken aback when I saw the index dividend yield was almost 5% as of the market close on 20 Mar 2020!

See below for the STI ETF with a dividend yield of 4.94% and a PE ratio of 9.

Dividend Yield is a crude way to tell us whether a stock is cheap or expensive. Simply refer to the formula below.

For the yield to be high, either the dividends per share has to be high or the share price has to be low.

Given that the dividends per share has been stable and only changes once a year, the spike in dividend yield among the blue chips has to be due to lower share prices.

But of course we can argue that the market is pricing in the poorer business sentiments in advance. The dividend yield would fall when the businesses distribute lower dividends per share in the future.

Hence, it depends on how pessimistic you are about future earnings after the Covid-19 impact. Since we cannot know exactly how it will turn out and where is the bottom, some of you might be considering dollar cost average the high yielding blue chips.

Dividend yields are not everything so please do not rely on it solely to make your investment decisions.

Here are 18 blue chips that are yielding more than 5% as of the market close on 20 Mar 2020.

#18 – Venture Corp: 5% dividend yield

Venture Corp at 2y low. 2008 low at $4.05.
  • Price = $13.98 (20 Mar 2020)
  • Dividend Yield = 5.0%
  • Free Cash Flow Yield = 5.1%
  • Payout Ratio = 0.6
  • PE = 11
  • PB = 1.6

#17 Mapletree Com Trust: 5.2% dividend yield

Mapletree Com Trust at 1y low.
  • Price = $1.77 (20 Mar 2020)
  • Dividend Yield = 5.2%
  • Free Cash Flow Yield = 4.5%
  • Payout Ratio = 1
  • PE = 9
  • PB = 1.1

#16 Dairy Farm: 5.3% dividend yield

Dairy Farm at 10y low. 2008 low at $3.90
  • Price = $3.97 (20 Mar 2020)
  • Dividend Yield = 5.3%
  • Free Cash Flow Yield = 19.3%
  • Payout Ratio = 0.9
  • PE = 17
  • PB = 4.4

#15 Yangzijiang SGD: 5.4% dividend yield

Yangzijiang at 2y low. 2008 low at $0.29.
  • Price = $0.835 (20 Mar 2020)
  • Dividend Yield = 5.4%
  • Free Cash Flow Yield = 24.6%
  • Payout Ratio = 0.3
  • PE = 5
  • PB = 0.5

#14 Hongkong Land USD: 5.7% dividend yield

Hongkong Land at 10y low. 2008 at $2.03.
  • Price = $3.90 (20 Mar 2020)
  • Dividend Yield = 5.7%
  • Free Cash Flow Yield = 11.4%
  • Payout Ratio = 2.6
  • PE = 46
  • PB = 0.2

#13 Mapletree Log Trust: 5.8% dividend yield

Mapletree log at 1y low. 2008 low at $0.33.
  • Price = $1.38 (20 Mar 2020)
  • Dividend Yield = 5.8%
  • Free Cash Flow Yield = -12.4%
  • Payout Ratio = 1
  • PE = 11
  • PB = 1.2

#12 CapitaCom Trust: 6.0% dividend yield

CapitaCom near 5y low. 2008 low at $0.43.
  • Price = $1.49 (20 Mar 2020)
  • Dividend Yield = 6.0%
  • Free Cash Flow Yield = 5.9%
  • Payout Ratio = 1
  • PE = 13
  • PB = 0.8

#11 Jardine C&C: 6.0% dividend yield

Jardine C&C 10y low. 2008 low at $8.75.
  • Price = $18.60 (20 Mar 2020)
  • Dividend Yield = 6.0%
  • Free Cash Flow Yield = 14.1%
  • Payout Ratio = 0.4
  • PE = 6
  • PB = 0.8

#10 OCBC: 6.3% dividend yield

OCBC at near 5y low. 2008 low at $4.03.
  • Price = $8.36 (20 Mar 2020)
  • Dividend Yield = 6.3%
  • Free Cash Flow Yield = 21.3%
  • Payout Ratio = 0.5
  • PE = 7
  • PB = 0.8

#9 Ascendas REIT: 6.4% dividend yield

Ascendas REIT at 2y low. 2008 low at $1.14.
  • Price = $2.51 (20 Mar 2020)
  • Dividend Yield = 6.4%
  • Free Cash Flow Yield = -6.4%
  • Payout Ratio = 1.1
  • PE = 16
  • PB = 1.2

#8 SATS: 6.4% dividend yield

SATS at 8y low. 2008 low at $1.14.
  • Price = $2.96 (20 Mar 2020)
  • Dividend Yield = 6.4%
  • Free Cash Flow Yield = 7.6%
  • Payout Ratio = 0.9
  • PE = 13
  • PB = 2.0

#7 SPH: 6.6% dividend yield

SPH at 15y low. 2008 low at $2.40.
  • Price = $1.81 (20 Mar 2020)
  • Dividend Yield = 6.6%
  • Free Cash Flow Yield = 8.9%
  • Payout Ratio = 0.9
  • PE = 14
  • PB = 0.8

#6 ComfortDelGro: 6.7% dividend yield

ComfortDelGro at 8y low. 2008 low at $1.10.
  • Price = $1.46 (20 Mar 2020)
  • Dividend Yield = 6.7%
  • Free Cash Flow Yield = 3.1%
  • Payout Ratio = 0.7
  • PE = 12
  • PB = 1.2

#5 CapitaMall Trust: 6.7% dividend yield

CapitaMall Trust at 10y low. 2008 low at $1.01.
  • Price = $1.78 (20 Mar 2020)
  • Dividend Yield = 6.7%
  • Free Cash Flow Yield = 5.4%
  • Payout Ratio = 1
  • PE = 9
  • PB = 0.8

#4 DBS: 6.8% dividend yield

DBS approaching 5y low. 2008 low at $6.90.
  • Price = $18.16 (20 Mar 2020)
  • Dividend Yield = 6.8%
  • Free Cash Flow Yield = 18.7%
  • Payout Ratio = 0.5
  • PE = 7
  • PB = 0.9

#3 UOB: 6.9% dividend yield

UOB near 5y low. 2008 low was at $8.92.
  • Price = $18.96 (20 Mar 2020)
  • Dividend Yield = 6.9%
  • Free Cash Flow Yield = 24.8%
  • Payout Ratio = 0.5
  • PE = 7
  • PB = 0.8

#2 Genting Singapore: 6.9% dividend yield

Genting Singapore at 10y low. 2008 low was $0.34.
  • Price = $0.58 (20 Mar 2020)
  • Dividend Yield = 6.9%
  • Free Cash Flow Yield = 12.9%
  • Payout Ratio = 0.7
  • PE = 10
  • PB = 0.9

#1 Singtel: 7.3% dividend yield

Singtel at 10-year low. 2008 low was $2.06.
  • Price = $2.41 (20 Mar 2020)
  • Dividend Yield = 7.3%
  • Free Cash Flow Yield = 8.3%
  • Payout Ratio = 0.9
  • PE = 13
  • PB = 1.3

P.S. STI plunged another 9% on 23 Mar 2020 at the time of writing. This would likely caused the dividend yields to spike up even more. The overall STI dividend yield would likely cross 5%.

Alvin Chow
Alvin Chow
CEO of Dr Wealth. Built a business to empower DIY investors to make better investments. A believer of the Factor-based Investing approach and runs a Multi-Factor Portfolio that taps on the Value, Size, and Profitability Factors. Conducts the flagship Intelligent Investor Immersive program under Dr Wealth. An author of Secrets of Singapore Trading Gurus and Singapore Permanent Portfolio. Featured on various media such as MoneyFM 89.3, Kiss92, Straits Times and Lianhe Zaobao. Given talks at events organised by SGX, DBS, CPF and many others.
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8 thoughts on “18 Blue Chips with 5% Dividend Yield and more”

  1. Hi Alvin, thanks for your sharing. May i pls know what is the significance of your Free Cash Flow Yield & how is it calculated?

    Reply
    • free cash flow is the amount of cash the business can generate after paying for all the operating and maintenance cash expenses in the company. Investors typically use free cash flow to check against the dividends given. The former should be greater than the latter.

      Free cash flow = operating cash flow – capital expenditure.
      Free cash flow yield = free cash flow / mkt cap

      Reply
  2. Div yield is now artificially inflated by the sharp drop in stock prices. If a stock was yielding 5% before the pandemic and has now lost 30% of its value, then can we reasonably assume next dividend (per share) amount would be similar to the last dividend amount, making a 7% dividend yield?

    No we can’t assume that. I would say dividend might remain at the previous level, but more likely it would drop. Therefore, using a fallen price to derive a high dividend yield is wishful thinking, and misleading, unless you have reason to believe the fundamentals of the company remains unchanged so the company has enough cashflow to keep the dividend amount.

    Few companies have such strength

    Reply

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