With inflation expected to be sticky for quite some time, in uncertain times like these, investors might want to consider dividend stocks. With how the news of de-dollarization and turmoil in the US economy shaking up the stock market, having certainty in a stock portfolio is peace of mind.
Why Dividend Stock
I strongly believe that dividend investing is a smart choice for investors who seek long-term growth and passive income. Dividend stocks are shares of companies that pay a portion of their earnings to their shareholders on a regular basis, usually quarterly or annually. Dividend investing can be a reliable source of passive income for investors, especially retirees or people who want to supplement their income.
One could argue that times of uncertainty make the return of growth stocks multiple times better once it renounce. While that is a reasonable choice, it isn’t wise to allocate all your asset to growth. That’s why having a portion of your stock portfolio in dividends to provide dividend income may be the wiser choice.
Secondly, dividend stocks are less volatile than other stocks because companies that pay dividends tend to be more stable and established. Even if you pass on, your estate planning is able to transfer your wealth to the next generation without having to worry if the company goes bust.
Thirdly, dividend stocks can provide a hedge against inflation because dividend-paying companies tend to increase their dividends over time to keep up with inflation. This means that the dividends paid out by these companies will likely increase as the cost of living goes up, providing investors with an effective hedge against inflation. In this way, investing in dividend stocks can help protect an investor’s purchasing power over the long term.
Lastly, dividend stocks can provide a cushion in case of a market downturn because companies tend to maintain their dividends even during tough times. If you have been investing seen 2020, you will know how volatile growth stocks can be, a 50% drop is nothing in a growth stock. However, if you were to invest in a dividend stock, a 10% drop is considered a worrying sign.
Top 5 Best Dividend Stocks to Invest in Singapore for 2023
Investing in Singapore stocks is boring, which is an opportunity in this uncertain economy as mentioned. Singapore has quite a number of considered safe assets to hold. The top 5 best dividend stocks to invest in Singapore for 2023 have a 1-year volatility of less than 10%; that’s awesome! The best part of all, these stocks have a track record of consistent dividend payments and good financial performance.
1. DBS Group Holdings Ltd (D05.SI)
DBS Group Holdings Ltd is one of the largest banks in Southeast Asia with a market capitalization of over $70 billion. The bank has a strong balance sheet, high profitability, and a diversified business model. DBS has consistently paid dividends and has a dividend yield of around 4%. The bank has also raised its dividends over the years, making it an attractive investment for dividend investors.
2. Singapore Telecommunications Limited (Z74.SI)
Singapore Telecommunications Limited, also known as Singtel, is the largest telecommunications provider in Singapore. The company has a market capitalization of over $36 billion and has a diversified business model with operations in Australia, India, and Southeast Asia. Singtel has a strong balance sheet, high profitability, and a dividend yield of around 4%. The company has consistently paid dividends and has raised its dividends over the years, making it an attractive investment for dividend investors.
3. Keppel DC REIT (AJBU.SI)
Keppel DC REIT is a real estate investment trust that owns and operates data centers in Asia Pacific and Europe. The trust has a market capitalization of over $3 billion and has a diversified portfolio of properties. Keppel DC REIT has a high dividend yield of around 4.5% and has consistently paid dividends since its listing in 2014. The trust has also raised its dividends over the years, making it an attractive investment for dividend investors.
4. Mapletree Commercial Trust (N2IU.SI)
Mapletree Commercial Trust is a real estate investment trust that owns and manages commercial properties in Singapore. The company is the biggest commercial trust in Singapore. With a market capitalization of over $6 billion and has a diversified portfolio of properties, including office buildings, retail malls, and serviced residences. Mapletree Commercial Trust has a high dividend yield of around 4.5% and has consistently paid dividends since its listing in 2011. The trust has also raised its dividends over the years, making it an attractive investment for dividend investors.
5. CapitaLand Limited (C31.SI)
CapitaLand Limited is one of the largest real estate companies in Asia with a market capitalization of over $16 billion. The company has a diversified business model with operations in Singapore, China, and other countries in Asia. CapitaLand has a strong balance sheet, high profitability, and a dividend yield of around 3.5%. The company has consistently paid dividends and has raised its dividends over the years, making it an attractive investment for dividend investors.
Stop and Invest now?
If you are a Singaporean, chances are your CPF(Central Provident Fund Board) account has already invested a portion in these stocks. With a dividend yield of about 3.5% to 4.5%, these stocks make the most ideal investment to financially retire without worrying too much.
You can invest in these stocks using your CPF OA once you have met the requirement. But if you would still like to invest in these companies, be sure to sign up through an online brokerage or open up an investment bank account. Here are my affiliate links to different online brokerages that I use. P.S. If you sign up using my referral link, you may get a chance to earn a free stock, cash coupon, or discount on your next investment purchase!
If you want to find out more about online brokerage, here is in-depth information on how to invest in stocks as a beginner.
Criteria for Selecting the Best Dividend Stocks
When selecting the best dividend stocks, it is important to consider several criteria.
Firstly, the company should have a strong balance sheet with low debt and high cash reserves. This will ensure that the company can continue to pay dividends even during tough times.
Secondly, the company should have a stable and predictable business model with a track record of consistent earnings. This will ensure that the company can maintain its dividends over the long term.
Thirdly, the company should have a high dividend yield and a history of raising its dividends over the years. This will provide investors with a reliable source of passive income and potential capital appreciation.
Comparison of Dividend Stocks in Yahoo Business & Yahoo Singapore
Yahoo Business and Yahoo Singapore are two popular sources of financial information for investors. Both platforms provide comprehensive data on stocks, including dividend stocks. Yahoo Business is a global platform that provides financial news, analysis, and data on stocks from around the world, while Yahoo Singapore is a localized platform that provides financial news, analysis, and data on stocks in Singapore and the region.
When comparing dividend stocks in Yahoo Business and Yahoo Singapore, investors should consider several factors, including the company’s financial performance, dividend history, and market trends. Yahoo Business provides a global perspective on stocks, while Yahoo Singapore provides a localized perspective on stocks in Singapore and the region. Investors should use both platforms to gather comprehensive data on stocks and make informed investment decisions.
Historical Performance of the Best Dividend Stocks of All Time
The best dividend stocks of all time have a track record of consistent dividend payments and strong financial performance. These stocks have provided investors with a reliable source of passive income and potential capital appreciation over the long term. Some of the best dividend stocks of all time include Coca-Cola, Johnson & Johnson, and Procter & Gamble.
Coca-Cola has paid dividends for over 130 years and has raised its dividends for over 50 consecutive years. The company has a strong brand, a diversified product portfolio, and a global presence. Johnson & Johnson has paid dividends for over 50 years and has raised its dividends for over 25 consecutive years. The company has a diversified healthcare business, a strong balance sheet, and a history of innovation. Procter & Gamble has paid dividends for over 120 years and has raised its dividends for over 60 consecutive years. The company has a diversified consumer products business, a strong brand, and a global presence.
Understanding Singapore Stocks
Singapore stocks are stocks that are listed on the Singapore Exchange (SGX). The SGX is the main stock exchange in Singapore and is one of the largest stock exchanges in Asia. Singapore stocks include companies from various sectors, including finance, telecommunications, real estate, and healthcare. Singapore stocks are regulated by the Monetary Authority of Singapore (MAS) and are subject to strict disclosure and reporting requirements.
Investing in Singapore stocks can provide investors with exposure to the Singaporean economy, which is one of the most developed and stable economies in Asia. Singapore stocks can also provide investors with exposure to other countries in the region, especially Southeast Asia. However, investors should also be aware of the risks associated with investing in Singapore stocks, including market volatility, currency risk, and regulatory risk.
Factors to Consider When Investing in Good Dividend Stocks
Investing is not as straightforward as one might think. There is a lot of information to consider before investing and proper research must be done. While investing in dividend stocks can be a smart way to generate a reliable source of passive income. In fact, this passive income may be indefinite till you pass it on to your loved ones. However, not all dividend stocks are created equal. It’s important to consider a few factors when selecting good dividend stocks to invest in. Here are some factors to consider:
Dividend Yield
The dividend yield is the ratio of the annual dividend payout to the stock price. A higher dividend yield generally means a higher income stream for investors. However, a very high yield can also indicate that the stock is risky or that the dividend may not be sustainable.
Dividend History
A company’s dividend history can provide insight into its stability and commitment to paying dividends. Look for companies that have a consistent track record of paying and increasing dividends over time.
Financial Health
It’s important to evaluate a company’s financial health before investing in its stock. Check its earnings, revenue growth, debt-to-equity ratio, and other financial indicators to ensure that the company has the financial stability to continue paying dividends.
Industry and Competition
Consider the industry the company operates in and it’s level of competition. Look for companies in industries with stable growth and low competition to ensure that the company’s dividend payouts are sustainable.
Valuation
Evaluate the stock’s valuation to ensure that it is not overpriced. Look at metrics such as the price-to-earnings (P/E) ratio and the price-to-book (P/B) ratio to determine whether the stock is undervalued or overvalued.
Yahoo Financial Singapore: Tools and Resources for Dividend Investors
Yahoo Financial Singapore provides a range of tools and resources for dividend investors. These tools and resources include stock screening tools, dividend calendars, financial news, and analysis. Yahoo Financial Singapore also provides comprehensive data on Singapore stocks, including their financial performance, dividend history, and market trends. Investors can use these tools and resources to make informed investment decisions and monitor their portfolios.
Investing in Dividend Stocks is a Smart Choice
Investing in dividend stocks is a smart choice for investors who seek long-term growth and passive income. Dividend stocks provide a reliable source of passive income, are less volatile than other stocks, provide a hedge against inflation, and can provide a cushion in case of a market downturn.
When selecting the best dividend stocks, investors should consider several criteria, including the company’s financial performance, dividend history, and market trends. Investors can use platforms like Yahoo Business and Yahoo Singapore to gather comprehensive data on stocks and make informed investment decisions.
