Came across this article on ShareInvestor site titled Do Dividend Plays Pay [link here >>]. I was initially surprised as i never thought that this book that we typically buy for SGD6.00 would have a website.
The article talks about how a big portion of the returns of equities in our region is actually from dividends:
a recent Citi Investment Research report noted that in the past 10 years, equities in Asia ex-Japan have generated a compounded total return of 5.9% per annum in US dollar terms, 46% of which came from dividends.
In the article is also talk on using payout ratio and retention ratio to identify companies with good dividend potential. I think its good measurements, but i would rather use operating cashflow and the sustainability of it as a good measure.
Remember, ratios are only good if you understand them and how they can help you. There is always alot of story behind certain ratios.
And also a good list of recommendations!
Personally i am vested in SingPost, Mobile one and Starhub. And abit of ST Engine (dun invest in this)
I did take a look at Thai Beverage. I think its got some good potential, although the business of spirits and beer is something i can’t get my head round at the moment.
Aztech is venturing in another direction. You can take it as something positive or negative but we know that Aztech HAVE been giving out dividends. However, dividend play on electronics consumer products tends to need the investor to understand it much better.
I will look into ETIKA more. The payout ratio looks damn good.