I just got back from in camp training and perhaps that’s why I couldn’t post the last 2 weeks. Hope everyone is still around.
I did some spring cleaning of my Dividend Stock Tracker by updating the dividend payout to 2010-2011 numbers.
The basic objective is to make sure the current yields are not inflated. I did one round in june to adjust the debt to assets for the companies tracked but this one is probably more interesting then boring gearing levels.
(Edit: Singtel Figures updated to current yield 4.5% instead of 5.1%)
None of the 18 changes show that they are giving out special dividends. Special dividends would probably distort the yields that you will get should you are looking for long term holdings.
In income investing, you want the company to earn more and their payouts to rise gradually with the income.
Strong Economic Moats
Singtel and VICOM shows the most positive developments. Singtel’s share price have been going nowhere while VICOM have proven itself to be very resilient in the recession as well as when the market recovers.
In fact, Singtel have been increasing dividends gradually since 2000.
Other notable mentions are SATS and SMRT. These stocks have good moats as well and enable them to be defensive in a downturn yet leverage on their moats to increase in cashflow.
Of all the stocks covered Cambridge and Lippo Map Retail REIT looks very questionable. I did one round of check already whether there is an expansion in share capital base. (note: if these figures are wrong please highlight to me thanks!)
Not all the stocks were able to maintain their dividend payouts. ST Engineering have cut their dividends as to the other 7.
I am more particularly worried whether my figures are right for Ascendas REIT and Fortune REIT. At 5% yield, Ascendas REIT does not look valuable at all!
For investors new to buying dividend stocks, this small summary shows that in good times, not all dividend stocks will maintain their yields. The frustrating thing is that we still cannot find that elusive stock that keeps increasing dividends, yet is defensive enough to weather a recession to maintain payouts. Right now, I would say we have 2, which is probably SMRT and VICOM.
If that is the criteria we are looking for, then perhaps this Singapore pond is not good enough to find them. My holding in Telefonica seem to exhibit this characteristic that I talk about then all Singapore stocks.
At times, we invest with a proximity bias (in Singapore stocks). In dividend investing, its worse because when you deal with foreign stocks, many have withholding taxes on dividend distributions that cut your yields. You would need to evaluation whether it is worth while or not.
Do check out the updated figures at my Dividend Stock Tracker today. It will make keeping track of blue chip yield stocks much simpler.