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SGX Dividend Stocks Spotlight: BRC Asia and More

AInvestSunday, Oct 6, 2024 8:31 pm ET
1min read
In the dynamic Singapore Exchange (SGX) market, dividend stocks offer investors a stable income stream and potential capital appreciation. This article spotlights BRC Asia Limited (SGX:BEC) and two other top dividend stocks, highlighting their dividend history, volatility, and sustainability.

BRC Asia Limited, a leading steel reinforcement prefabricator, recently announced an interim tax-exempt dividend of S$0.06 per share, payable on 15 November 2024. With a dividend yield of 7.4%, BRC Asia ranks among the top 25% of Singapore's market. However, its dividend history has been volatile, with past inconsistencies and cuts. Despite this, current dividends are well-covered by earnings (35.9% payout ratio) and cash flows (85.3% cash payout ratio), suggesting a sustainable distribution for now.

BRC Asia's earnings growth and cash flow generation play a crucial role in its dividend stability. The company has seen EPS rise by 29% annually over the past five years, providing a solid foundation for dividend growth. Additionally, its low payout ratio (60%) allows for flexibility and future growth.

Singapore Exchange Limited (SGX:S68), the integrated securities and derivatives exchange, offers a stable dividend with a 3.4% yield. The company has maintained consistent dividend payments over the past decade, with payout ratios well-covered by earnings and cash flows. However, its dividend yield is lower compared to top-tier payers in Singapore's market.

UOB-Kay Hian Holdings (SGX:U10), an investment holding company, provides a higher dividend yield of 6.6%. Despite recent growth in net income, its dividend payments have been volatile and not well-covered by free cash flows due to a high cash payout ratio. Significant insider selling raises concerns about dividend sustainability.

In conclusion, BRC Asia, Singapore Exchange, and UOB-Kay Hian Holdings offer investors diverse dividend options. While BRC Asia's dividend history has been volatile, its earnings growth and cash flow generation provide a solid foundation for future stability. Singapore Exchange offers a stable dividend, and UOB-Kay Hian Holdings provides a higher yield, despite concerns about dividend sustainability. Investors should carefully evaluate each company's dividend history, volatility, and sustainability before making investment decisions.
Disclaimer: the above is a summary showing certain market information. AInvest is not responsible for any data errors, omissions or other information that may be displayed incorrectly as the data is derived from a third party source. Communications displaying market prices, data and other information available in this post are meant for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any security. Please do your own research when investing. All investments involve risk and the past performance of a security, or financial product does not guarantee future results or returns. Keep in mind that while diversification may help spread risk, it does not assure a profit, or protect against loss in a down market.