5 Best Dividend Stocks To Buy In Singapore For Passive Income in 2024
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Singaporeans love money, and who doesn’t like to have extra cash over our regular salary?
Dividend investing is a great way to create a passive income. And dividend-paying stocks are the perfect investment for lazy young investors who wants to buy a stock and hold it forever.
However, savvy investors are aware that not all dividend-paying stocks are great stocks to invest in, and dividend income is not completely future-proof.
Finding good dividend paying stocks takes time and quality of a stocks depends on the dividend stock’s fundamentals and a few of other criteria.
Nonetheless, dividend investing is one of the best ways to create wealth.
KEY TAKEAWAYS
- Profitable dividend investing need to couple with trading on the best online trading platforms in Singapore for low fees high return.
- Investors can potentially achieve early retirement with passive income through investing when they invest in the right dividend-paying stocks after performing their due diligence in fundamental analysis.
- Getting started early and open a brokerage and CDP account early can help you leverage the power of compounding early.
Best Dividend Stocks To Buy In Singapore
Dividend investing is a critical part of my investing strategy which I like to use to generate passive income and create multiple income streams to grow my wealth.
Although REITs and ETFs are great investment that pays a dividend, I will not be including them in this list, as this list is purely for stocks that pay a dividend.
Here are a few of the dividend-paying stocks that I may want to invest in the long term when the price is right.
1. DBS Bank (SGX: D05)
DBS Bank (SGX: D05) is the leading financial service group in Asia with its presence in over 18 markets. DBS focus on its growth in 3 key areas in the world; China, Southeast Asia, and South Asia.
- S$646 Billion assets in management
- S$4.72 Billion in net profit
- USD$7.8 Billion in brand value
- >30,000 employees
DBS operates in markets such as; Singapore, Hong Kong, People’s Republics of China, Taiwan, Dubai, Australia, Thailand, Mumbai, Malaysia, United Kingdom, United States, Vietnam, Philippines, Korea, Japan, Myanmar, and Indonesia.
Stocks Financial Data
DBS Bank is trading with the following stock information at the time of writing:
- Price: 32.800
- P/B ratio: 1.444
- P/E ratio: 8.70
- Dividend Yield: 5.50%
- Dividend Yield 5 yr-average: 4.31%
In my opinion DBS is probably the best out of the 3 local banks, and as a customer of DBS myself, I think they offer really good service and it is always adapting to the new changes around the financial sector.
2. SGX (SGX: S68)
SGX (SGX: S68) is the Stock Exchange of Singapore, it operates the only integrated securities exchange and derivatives exchange in Singapore.
- SGX provides services such as listing, trading, clearing, settlement, depository, and data services
- 40% of listed companies and over 80% of listed bonds are originating outside of Singapore.
- Headquarters in Singapore, SGX is currently AAA-rated and is globally known for its risk management and clearing capabilities.
- 681 stocks listed in SGX
- 50 ETFs listed in SGX worldwide
Stocks Financial Data
SGX is trading with the following stock information at the time of writing:
- Price: 9.670
- P/B ratio: 6.078
- P/E ratio: 18.71
- Dividend Yield: 3.42%
- Dividend Yield 5 yr-average: 3.376%
In my opinion, it is one of the safest blue chip stocks you can buy in Singapore, where it is more like a bond than a stock.
3. SBS Transit Ltd. (SGX: S61)
SBS Transit (SGX: S61) is the leading bus operator in Singapore which have a fleet of more than 2,700 buses and operates 217 route services. The bus serves 16 interchanges and more than 3,000 bus stops.
Expanding its business, SBS Transit also operates the light rail system (LRT) in Sengkang and Punggol, mass rapid transport (MRT) for the North East Line (NEL).
With sky high CEO prices, more people will be taking public transport than getting their own cars in the future.
Stocks Financial Data
SBS Transit is trading with the following stock information at the time of writing:
- Price: 2.740
- P/B ratio: 1.272
- P/E ratio: 12.49
- Dividend Yield: 4.04%
- Dividend Yield 5 yr-average: 3.398%
SBS Transit seems to be a pretty good pick for a stable dividend stocks.
In my opinion, it is one of the best Singapore blue chips.
4. CapitaLand Investment (SGX: 9CI)
My 4th choice is CapitaLand Investment, a newly listed stock in the SGX.
CapitaLand Investment is formed after it demerged from its development business (CapitaLand Development) of CapitaLand Limited.
On 20 September 2021 CapitaLand Limited (SGX: C31) undergo a major restructuring of its business and have delisted from the SGX. It has since separated its business into CapitaLand Investment and CapitaLand Development.
- CapitaLand Investment (SGX: 9CI): Is publicly listed in the SGX and is mainly comprised of 3 activities; Fund management (S$100B), lodging management (S$160K), and capital recycling (S$3B).
- CapitaLand Development: Comprise of the property development business where it deals with large-scale development projects. This arm of the business is privatized, thus will not be able to purchase in the stock market.
CapitaLand Investment (SGX:9CI) is invested in 6 of the major listed real estate funds in Singapore.
- CapitaLand Integrated Commercial Trust (SGX: C38U)
- Ascendas Real Estate Investment Trust (SGX: A17U)
- Ascott Residence Trust (SGX: HMN)
- CapitaLand China Trust (SGX: CY6U)
- Ascendas India Trust (SGX: CT6U)
- CapitaLand Malaysia Mall Trust (KLSE: 5180)
Information Source: CapitaLand Website.
Stocks Financial Data
CapitaLand Investment is trading with the following stock information at the time of writing:
- Price: 3.020
- P/B ratio: 0.988
- P/E ratio: 18.00
- Dividend Yield: 4.00%
- Dividend Yield 5 yr-average: -%
As CapitaLand Investment does not have much data, we will use past year data of CapitaLand Limited as guidance.
In the past, CapitaLand Limited pays a dividend yield of approx. 3%.
CapitaLand Investment will probably pay a similar or slightly higher dividend yield since the development side of the business is separated from CapitaLand Investment.
Although we lack historical data, I think it is a pretty good opportunity to buy this amazing stock with a great management team.
5. ST Engineering (SGX: S63)
ST Engineering (SGX: S63) is my 5th pick for dividend stocks that I can buy and hold for a long time.
ST Engineering is a global technology, defense, and engineering group that has offices set up across Asia, the Middle East, and the United States serving more than 100 countries.
ST Engineering utilizes innovation and technology and has business in the field of aerospace, smart city, defense technology, and public security segments.
3 Business segments
- Commercial Aerospace (CA)
- Urban Solutions & Satcom (USS)
- Defense & Public Security (DPS)
Group Revenue breakdown
- 59% Asia
- 21% The United States
- 15% Europe
- 5% Others
Stocks Financial Data
ST Engineering is trading with the following stock information at the time of writing:
- Price: 3.800
- P/B ratio: 4.814
- P/E ratio: 22.24
- Dividend Yield: 4.21%
- Dividend Yield 5 yr-average: 4.139%
In my opinion, ST Engineering is a very stable dividend-paying stock, but with the current price, it is overvalued.
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Criteria When Picking The Best Dividend Stocks in Singapore
While there are many way people used to pick the best dividend stock to buy and hold. I too have my own ways to pick the best Singapore dividend stocks that offers high dividend yield and steady income.
To me a top Singapore dividend stocks should have the following few criteria.
1. Unbeatable MOAT
MOAT is something that is talks a lot by Warren Buffett, it is the very element that protects your investment from being attacked by the “enemy”.
Company with good MOAT protects it from being harmed in anyway when there is market turmoil, market crash, or when there are a lot of competitors in the space.
And have an unbeatable MOAT will be my top priority list when finding a high quality high dividend stocks in Singapore.
2. Feels Like Growth Stocks
Ok ok, I know this post is about dividend stock, but who says a dividend stock cannot also feels like a growth stock?
What I mean is that you want to get more dividend payout as you invest in the stocks right?
You want your dividend to grow as you stay invested in the stock.
Having said that, caution need to be taken that the company is not overcommitting on their dividend payout and lead to the collapse of the company.
The dividend growth should comes with the growing in the earning of the company, ensuring that it is sustainable for the long-term.
3. Reasonable Stock Price
No stocks is worth a price that is too expensive, this idea applies to dividend stock as well.
No one will want to buy an Apple worth $1 at the astronomical priced of $10. But when the same Apple is priced at $0.50, you may want to buy more of it.
When searching for the right high-yield stocks to buy on the Singapore Exchange (SGX), I will try to find those few which are priced below it’s value while offering healthy dividend yield.
Even for the best dividend yield stocks, it should only be brought when the price is right.
Top Metrics I Like Consider When Picking Stocks
- P/B ratio, and PE ratio, together with ROE, and EPS Growth rate are great ways to determine if a stock is overvalued, or undervalued.
- D/E Ratio and current ratio are one of the best metrics to determine if the company is over-leverage.
My Takeaway
These are just some stocks which I personally may want to invest in the future, however investing is a personal choice, it is good to always do your own research into the stocks and securities that you want to invest before purchasing any shares in the company.
Like finding the Best REITs to invest in Singapore, there are two ways I will like to check on the stock I am pending to buy or sell.
- Fundamental analysis is a good way to identify good stocks which can have a potential of giving you a good return in the future.
- Technical analysis is a good way to look at the short term movement of the stocks to understand if it is currently over brought or oversold.
If you are still thinking about investing and have not yet created an account with any broker or is unsure how to get started, check out my beginner investor starters guide:
- Best online trading platform for beginners in Singapore.
- How to buy Singapore Stocks For Beginners with the cheapest brokerage.
- How to buy US Stocks in Singapore with $0 Commission fees.
- How to buy China Stocks such as Alibaba, Tencent and Baidu in Singapore.
- Low-Risk Investment to invest in Singapore.
- Best Cash Management Account (CMA) in Singapore to grow your uninvested cash at low risk.
What do you think about these stocks? Do you think that are good, or bad? Let me know in the comments below!
Oh ya, just before you go, here are some handpicked articles that you will surely be interested:
Disclaimer: I may or may not have invest in any of them, what’s listed here is only for entertainment purpose only and it should never be used as any form of investment advice. This is my diary on my stock analysis, while I’ve been investing for +15 years, I am still learning. I wish to share what I learn during my investment journey so you may learn from both my success and mistakes. Enjoy!
- Dividend Investing Singapore: Complete Beginners Investor Guide
- Best Undervalued Stocks in Singapore That Pays High Dividend in 2024 (Updated)
- Price to Sales Ratio (P/S Ratio): Investor’s Guide to Valuation Metrics When Profit is Absent
- Price to Earning Ratio: Dividend Investor’s Essential Metric to Know
- 3 Best Singapore Bank Stocks To Buy Now For High Dividend Yield in 2024 (Updated)
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Antony C. is a dividend investor with over 15+ years of investing experience. He’s also the book author of “Start Small, Dream Big“, certified PMP® holder and founder of IncomeBuddies.com (IB). At IB, he share his personal journey and expertise on growing passive income through dividend investing and building online business. Antony has been featured in global news outlet including Yahoo Finance, Nasdaq and Non Fiction Author Association (NFAA).
