Investment Moats

Dividend distribution frequency added to Dividend Stock Tracker

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I decide to value add to users of my Dividend Stock Tracker.

For new readers, the Dividend Stock Tracker tracks some of Singapore best yielding dividend stocks, enabling you to see the stocks’ dividend yield change with daily change in stock prices , latest stock valuation based on PE, EV/EBITDA and how leveraged the dividend stocks are. (Read more here)

Dividend Distribution Frequency

I think one of the problems readers faced is that when viewed the list on my tracker, they will still need to go to SGX.com to find out the frequency of distribution.

The frequency can be pretty consistent, but it needs manual updates on my end. But I will work out a schedule to keep it up to date weekly.

If you click on each stock, at the bottom remarks, you will see the historical dividend date and amount.

You will be able to estimate the frequency of the ex dividend dates and the proportion of distribution.

Alert: The dates and amount is based on historical declaration. Dividends are discretionary and a company can change their dividend policy readily. Use it as a guide not that you will definitely get it.

Removal of SBS Transit

I will be doing some spring cleaning and the first task is to remove SBS Transit from the tracker.

SBS used to be a smashing dividend stock, but like SMRT, it will not die, but that does not mean it can pay out a steady dividend.

Inclusion of Venture Corporation

I decide to add a large tech company to the mix. Venture is a contract manufacturer who has been paying a consistent $0.50 dividends for the past years.

The payout ratio is like near 100% of earnings.

Dividend Withholding Tax Status on Hong Kong Listed China Shares

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We mentioned in past articles that international stocks are susceptible to a percentage of withholding tax, which will reduce your dividends. For a breakdown on different countries and their withholding tax reference, take a look at this article.

I was recently interested in some China shares listed on the Hong Kong Stock Exchange.  Since they do distribute dividends, I am not sure if a 10% withholding tax will be levied.

However, I found this article here dated 18 July 2012 that seems to indicate the withholding tax since 2009 is only 5%:

China’s State Administration of Taxes (SAT) has announced a relaxation of the rules governing the withholding tax that foreign investors have to pay on dividends repatriated from their share of investments in Chinese companies.

Companies and shareholders based in countries outside Mainland China (such as the United Kingdom, Hong Kong and Singapore) that have double taxation agreements (DTAs) with China will only have to pay 5% in withholding tax on the dividends they receive from Chinese companies, instead of the usual 10% payable by companies and shareholders resident in countries without DTAs.

Although the reduced rate has actually been available since 2009, parent companies resident in countries with bilateral DTAs with China will now find it easier to qualify for the reduced rate under more relaxed criteria. Previously, for example, there was a stipulation that the direct parent company of the Chinese subsidiary should have a substantial active business in their country of residence, which was difficult to demonstrate when the parent was, in many cases, a holding company.

It was reported by SAT that the equivalent of nearly USD65bn in dividends was repatriated by foreign companies from China in 2011. It is hoped that, while the tax reduction could encourage companies to repatriate more dividends out of their current investments, the clarification could provide a tax incentive for more investments in the future.

I have not verified this myself, but has any readers investing in China ADR or HKSE China shares have validated this is true?

Starhub garners great first quarter result 2011

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I regretted selling 4 lots of my Starhub shares. I never got to pick them up at a lower price so this makes a great case study for those who sold off wanting to collect at a lower price.

Starhub today announced their first quarter results. The result turn out to be great as last year first quarter it was very very dire due to very high selling expense.

Not the case this year.

  • Profit rose 62% from 42mil to 69 mil
  • EBITDA margin rose from 22.5% to 30.1%
  • Cash holdings boosted from 237 mil to 303 mil
  • Total debts fell from 800 mil to 750 mil
  • Free Cash Flow was better at 132 mil vs 122 mil in 2010

Good result because debts are getting paid off, and net debt is only 450 mil. If we estimate a full year FCF of 520 mil, they can pay out 340 mil in dividends yet have 180 mil to pay off debts further.

Starhub is in a great position! Really regretted my decision!

I run a free Singapore Dividend Stock Tracker . It  contains Singapore’s top dividend stocks both blue chip and high yield stock that are great for high yield investing. Do follow my Dividend Stock Tracker which is updated nightly  here.

Screening for dividend stocks with Dividend Stock Tracker

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(Click to see larger pic)

We updated our Dividend Stock Tracker this weekend. To understand more about our dividend stock tracker read this article.

The primary updates are the data in the balance sheets.

We also decide to bring forth net debts to assets to the table. This is because evaluating whether a stock is over leverage is quite important.

We decide also to provide more acute indication as to whether a stock have relatively high yield and whether a stock is paying more than it’s free cash flow yield. A good dividend stock will pay out from it’s free cash flow and not always rely on cash holdings or raise debts.

A caveat that I always make about our stock tracker is that fundamental data is based on annual / quarterly updates so announcements and adjustments made 5 days ago will not be reflected as we will not have the adjusted information.

A good example here is why First REIT has a –30% FCF yield. They just made big acquisitions which will come online at FY2011 annual report so it will not be reflected currently.