SINGAPORE: Income investors can take comfort in the fact that the Singapore exchange boasts a variety of stocks offering regular dividends.
Some businesses may even distribute special dividends due to their strong performance or having surplus capital. According to Royston Yang from The Smart Investor, 3 Singapore stocks may offer special dividends in 2024.
DBS Group (SGX: D05)
DBS Group, Singapore’s largest bank, reported a stellar third quarter for 2023, with a 16% year-on-year increase in total income, reaching S$5.2 billion. The net interest margin (NIM) rose to 2.19%, contributing to a 23% year-on-year net interest income (NII) increase to S$3.7 billion. CEO Piyush Gupta is optimistic about 2024, maintaining NIM around current levels and net profit at the 2023 record level.
Citigroup (Citi) analysts suggest that DBS might distribute a special dividend due to its excess capital. The bank’s robust financial position, exemplified by a 33% surge in net profit to S$7.8 billion for the first nine months of 2023, positions it well to consider a special dividend akin to the S$0.50 paid out in 2022.
iFAST Corporation Limited (SGX: AIY)
iFAST, a financial technology company facilitating unit trusts, equities, and bonds trading, reported impressive third-quarter results for 2023. The net profit more than quadrupled to S$8.5 million, partly attributed to the ePension division’s contribution. Despite market volatility, net inflows of S$751 million were recorded, driving assets under administration to S$19.12 billion as of September 30, 2023.
With a promising outlook for 2023 and the ePension division expected to contribute significantly, iFAST, which paid an annual dividend of S$0.048 for 2021 and 2022, may declare a special dividend in its full-year results announcement in February 2024.
Sembcorp Industries Ltd (SGX: U96)
Sembcorp Industries, an energy and urban solutions provider, reported resilient earnings for the first half of 2023. Despite a 6% year-on-year revenue dip to S$3.7 billion, the underlying core net profit rose 8% to S$530 million. The company generated a positive free cash flow of S$376 million for 1H 2023, setting the stage for another special dividend akin to the S$0.04 distributed in 2022.
Investors can anticipate future growth from Sembcorp Industries as it focuses on expanding its renewables portfolio. The recent Investor Day 2023 outlined a five-year plan, with up to S$14 billion allocated for investments in renewables and decarbonization solutions. The company aims to increase its renewable capacity to 25 GW by 2028, with recent acquisitions in Vietnam, China, and India aligning with this strategic objective.
Disclosure: Royston Yang has investments in DBS Group and iFAST Corporation Limited./TISG