Dear readers, which largest-cap Singapore stocks are paying over more than 8% dividend yields against the current stocks markets backdrop? Is it cheap to invest in these high-dividend largest Singapore stocks right now?
First, let us take a look at the top ten stocks ranked in terms of decreasing market capitalisation with the accompanying dividend yields.
1. Mapletree NAC Trust (8.05%)
2. Ascott Trust (8.14%)
3. ESR-REI (9.14%)
4. Manulife Reit USD (8.21%)
5. HPH Trust USD (10.92%)
6. CromwellReit EUR (10.46%)
7.Fraser Hospitality Trust (8.89%)
8 Sasseur Reit (9.38%)
9. Pacific Century (8.67%)
10. Accordia Golf Trust (8.32%)
A quick look at the list shows that most of the entrants are REITS and Business Trusts. This is not surprising given their typically high dividends as a nature of their structure. The list above was generated from a stock screener and hence I need to provide further analysis of these stocks screened out as below.
The dividend yields are inevitably based on past dividend payouts divided over current stock price. With lower stock prices (smaller bases) in general experienced by the Singapore stocks markets, the actual dividend yields of the above stocks going forward should be lower if dividend payouts catch up with the lower trading fundamentals of the stocks. Hence the list above consists of stocks which have not been doing well like HPH Trust and Sasseur Reit for example though Sasseur Reit has caught up in stock price recently.
With Covid-19 pandemic affecting all businesses, shops shutting down, the impact on these developments on Reits and Trusts should be negative and remain to be known. Hence, I don’t think it is a good idea to devote too much of one’s portfolio in Singapore Reits and Trusts. Even though these are traditionally known to be safe assets. But it takes Covid-19 to remind investors that Reits and Trusts being equities after all are still subject to the vagaries of the stocks markets.
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