0:00 Here are the best 6 dividend stocks in Singapore. I don’t want to waste any of your time, so here are the names: Singapore banks, Singapore Exchange, Sheng Siong, Parkway Life, Mapletree Industrial Trust and ST Engineering. And with that being said, let’s dive right into the first name, Singapore banks. Now, the reason I group this by Singapore banks instead of any one name, is because all 3 banks, DBS, UOB and OCBC are good banks, and they fulfill the 3 criteria that every good dividend stocks should have. First, they have always been paying consistent, growing dividends over the years, except for 2020 of course, because MAS put a dividend cap on Singapore banks. Their payout ratio isn’t too high either, which means their dividend payout is sustainable.
0:46 Second, their dividend growth is backed by strong financials. All 3 of them have been able to consistently grow their earnings, while keeping their non-performing loan ratio low. Not just that, they are well-diversified across different business segments like consumer banking, wealth management, and various fee-based income streams. More importantly, they have been actively working to reduce its reliance on net interest income. A clear sign of this progress is DBS now estimates that their net interest margin sensitivity has now reduced to just SGD4M per basis point change as compared to the previous SGD18M during 2021. This represents a drop of almost 77% in NIM sensitivity, over the past 3 years. Likewise, NIM sensitivity has also decreased by 40% for both OCBC and UOB
1:36 as compared to the previous cycle. Because of that, it is expected each 25 bps Fed rate cut will only reduce Singapore banks’ 2025 earnings by just 1-2%. Third, they have durable competitive advantages, aka strong moat that protects their earnings and market share. In Singapore, these 3 banks alone control the vast majority of domestic deposits and loans, giving them significant pricing power and operational scale. At the same time, they have also been steadily growing their overseas presence, which can help to provide new growth engines, while also helping to reduce reliance on just the Singapore market alone. For example, DBS has expanded into India, Taiwan, and Hong Kong. OCBC has built a strong presence in Malaysia, Indonesia, and Greater China. Meanwhile,
2:26 UOB has been deepening its reach in Southeast Asia through the acquisition of Citibank’s consumer banking businesses in Malaysia, Thailand, Indonesia, and Vietnam. However, just because the banks are great dividend stocks doesn’t always make them a great buy. That’s because valuation still matters, and even the best companies can become poor investments if you overpay for them. And right now, all 3 banks are trading at high price to book ratios when compared to their historical average. This raises the risk of downside surprises, especially if the Fed starts cutting rates more aggressively, or if economic conditions soften in the region. Because of that, it’s probably better to wait for a more attractive entry point, one that offers a healthier balance of both dividend yield and valuation.
3:13 Quick pause, if you are looking for the cheapest broker to start your investing journey, check out Interactive Brokers. It has the lowest fees for stocks, ETFs, options and more. Not just that, Interactive Brokers lets you easily research stocks. Like you want to check out company financials? Neh, here it is. You want to check out analyst ratings, neh, here’s a bunch of them. It even has free technical insights which tells you where the stock might possibly go next. So, sign up to Interactive Brokers today, and let’s get back to the video. Moving on, Singapore Exchange Limited, or SGX is also another strong dividend paying company. It has a track record of consistent dividend payouts that have steadily increased over the years. But more importantly, it maintains a sustainable payout ratio of
4:00 around 60%+ as of last year, indicating that its dividends are well-supported by earnings. You can see that their revenue, net income as well as free cash flow has been reliably going up over the years, and they enjoy close to 50% in operating margins. Their revenue sources are almost evenly split across cash equities, derivatives, fixed income and platform related fees. This diversification helps SGX maintain stable earnings across different market conditions, while reducing reliance on any single business segment. However, despite that, SGX is currently facing a few issues. First, SGX is facing growing competition. The number of companies listed on SGX has dropped by around 20% over the past five years, while Bursa Malaysia has continued to attract more listings during the same period.
4:51 On top of that, the quality of companies on SGX has also been an ongoing concern. About 8% of companies listed on SGX are currently suspended, while only 70% of Mainboard companies are profitable, compared to just 43% for Catalist companies. And even more alarming, 86% of Catalist stocks are now trading below their day-one closing price, with 40% having lost almost all of their initial value. Thankfully, MAS is aware of these challenges and has introduced a series of measures to revitalise the Singapore market. Though, restoring retail investor trust and confidence remains an area that has yet to be fully addressed. And we’ll need to wait for further updates and initiatives in the coming months.
5:36 So, is SGX a buy right now? While it remains a solid dividend-paying stock, its current stock price appears to have run slightly ahead of its valuations. Recent analyst price targets from OCBC and RHB stand at $14.09 and $13.60 respectively, both slightly below SGX’s current share price. Similarly, valuation tools like GuruFocus also indicate that the stock may be slightly overvalued at this point. This suggests that while SGX remains fundamentally strong, the current price may have already reflected much of its near-term upside. For long-term investors seeking steady dividend income, it could still be a worthwhile addition—especially on any price dip. Next up, Sheng Siong. Sheng Siong also has a very strong track record of consistently
6:22 increasing its dividends. Its dividend payouts have not only grown over the years but are also well-supported by a sustainable payout ratio of around 70%. This of course is due to its strong financials, where Sheng Siong is able to reliably grow its revenue, net income as well as free cash flow over the years. How? They do it by constantly opening new stores in housing estates in Singapore. They also currently have 6 stores in China, though it only contributes to only a small part of their total revenue. Their operating margin is a little low at 10%, but this is fairly common among physical retailers. The great thing about Sheng Siong, besides its steadily growing financials, is that it’s actually rather recession proof. That’s because people will still need to buy groceries no matter what. In fact,
7:10 from what we have seen, during times of crisis, Sheng Siong can perform exceptionally well as kiasu people rush to stock up on toilet paper and instant noodles. And even though there are many other groceries in Singapore, such as FairPrice, Giant, ColdStorage and various online platforms, Sheng Siong has managed to remain competitive. And it achieves this through a clear value-for-money positioning, efficient operations, and a loyal customer base. As for its valuation, analysts currently assign the stock a median target price of around $1.89, suggesting there may still be some upside potential. Likewise, valuation tools like GuruFocus indicate that the stock is trading close to its fair value. Moving on, the next name is a REIT, and it’s none other than Parkway Life REIT. Parkway Life is one
7:58 of the few Singapore REITs that has consistently delivered growing dividends over the years. This strong performance is largely thanks to its defensive portfolio of healthcare assets, supported by long-term leases that include built-in rental escalations. For example, while other REITs like CICT have a weighted average lease expiry (WALE) of just a few years, Parkway Life boasts a WALE of 15 years. This helps to provide high earnings visibility, reduce lease renewal risk, while ensuring a more stable stream of income for investors, even during periods of market uncertainty, all of which are clearly reflected in their strong financials. The REIT owns three private hospitals in Singapore, capturing a significant share of the local private healthcare market. It also holds a sizable portfolio of nursing homes in Japan and,
8:46 more recently, expanded into France with the acquisition of several French nursing homes. Thus further diversifying into another market with strong fundamentals in the aged-care sector. However, by expanding into overseas markets, the REIT now has to face currency risk from the depreciating yen and euro. Uh oh. Thankfully, Parkway Life REIT has actively managed this risk by implementing currency hedges put in place all the way till 2030. On top of that, Parkway Life REIT maintains prudent debt management. With a healthy gearing ratio of 36%, it has ample headroom to fund future acquisitions or asset enhancements without taking on excessive leverage. The management also takes a disciplined approach to debt maturity, aiming to keep no more than 30%
9:32 of total debt maturing in any single year, to avoid bunching effects and concentration risk. So, is the stock attractive at this point? Analysts are giving it a target price of around $4.67, which implies an upside potential of 11%. However, it’s worth noting that its current price-to-book ratio is slightly above its historical average, which may suggest the stock is already priced at a premium. As such, investors should carefully consider whether the premium is justified in light of the REIT’s future prospects and broader market conditions. Alright, the next one is Mapletree Industrial Trust. You know, I was actually trying to choose between Mapletree Industrial Trust, Capitaland Integrated Commercial Trust, and Capitaland Ascendas REIT, but in the end I settled with MIT.
10:20 Now, don’t get me wrong — all three REITs are solid and well-managed. However, what sets Mapletree Industrial Trust (MIT) apart is its more defensive portfolio. CapitaLand Ascendas REIT has significant exposure to the office sector, while CICT holds a mix of retail and office assets — both of which are typically more vulnerable to shifts in economic conditions, consumer behavior, and evolving workplace trends. In contrast, MIT’s portfolio is predominantly made up of data centres and high-tech industrial properties. These asset classes tend to be more resilient through economic cycles, and may offer greater stability in uncertain environments. MIT has a strong track record of steady and growing dividends. However, if you look at
11:05 their financials, their net income as well as free cash flow hasn’t been doing so well since 2021. This isn’t a problem unique to MIT, but rather is a trend seen across the REIT sector, largely due to the rise in borrowing costs driven by the higher interest rate environment. Over the next 2 years, analysts expect the REIT to have a 5-6% revenue decline as well as a 4% drop in distribution per unit, due to rising vacancies in data centers across the US and Singapore. And to further add on, 24% of their debt will be maturing this year, which may further drive up the cost of borrowing. However, with that being said, not everything is bad. DBS believes that most of the loss of income from non-renewals for the US data-centers will be largely
11:51 compensated by higher contributions from its past acquisitions in Japan, new contributions, rental escalations and continued lease-up of its asset at Kallang Way. So, is the stock attractive at this point? While JP Morgan has recently lowered its target price to $1.90, other analysts have continued to assign target prices ranging from $2.30 to $2.60, suggesting there may still be upside potential. That said, the stock is currently trading slightly above its 5-year average price-to-book ratio, which could indicate that it's priced at a mild premium. However, given its strong fundamentals and long-term growth potential, any meaningful price dips could be a good buying opportunity for long-term investors. Last but not least, we have ST Engineering — Singapore’s leading defense contractor.
12:40 While the company has been consistent in paying dividends, the growth in payouts has been relatively modest over the years. But if you look beyond the dividends, the fundamentals will tell a stronger story. ST Engineering’s order book has nearly doubled, from $15.4 billion to $28.5 billion. And over the past few years, the company has delivered steady growth in revenue, net profit, and free cash flow, signalling robust operational performance and long-term potential. Not only that — ST Engineering has already achieved half of the targets outlined in its 5-year roadmap set in 2021, and it remains on track to meet the remaining goals. At the same time, the company has unveiled a new 5-year strategic plan. Key targets include growing group revenue at 2.5x the global GDP growth rate, increasing net profit
13:29 at a rate up to 5 percentage points higher than revenue growth, and aligning dividend payouts with profit growth to ensure shareholders benefit directly from its performance. For this, ST Engineering has identified several key growth pillars for the years ahead. These include commercial aerospace revenue, which is expected to grow at twice the industry rate over the next five years; smart city solutions, projected to expand at 3.5 times the global GDP growth rate; and a significantly larger addressable international defense market, now estimated at over $11 billion. So, is ST Engineering stock attractive right now? Analysts have raised their price targets to around $7, and the stock has not only reached that level — it has slightly surpassed it. Given its strong
14:15 fundamentals and growth outlook, it's no surprise that the stock is now trading at a premium. Anyway, that’s all for this video. Hopefully you found this useful. Like, share and subscribe as I’ll be posting new videos every Monday, Wednesday and Friday.
