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In this article, we will look at some of the best ways to find high dividend Singapore stocks. Each of these methods has its pros and cons, and finding the right strategy for you will depend on your personal investment goals and risk tolerance.

There are many ways to invest in the Singapore stock market. High dividend stocks can be a great way to passively earn income from your equity investments. In general, high dividend stocks have higher payout ratios and are more likely to pay dividends consistently.

Let’s take a closer look at each of the strategies for high dividend Singapore stocks and see if any might be a good fit for you.

Dividend Reinvestment Program (DRP)

A dividend reinvestment program (DRIP) is a type of investment scheme where an investor can reinvest his dividends back into more units of the scheme. While this may not be possible for all types of stocks, it is a very common practice for stocks issued by Singapore Exchange (SGX).

Dividend-paying stocks on SGX are commonly issued under a DRIP, which allows investors to buy more shares with the dividends they receive. This effectively allows you to compound your earnings through a DRIP. Dividend-paying stocks are also widely available on SGX, which makes this one of the easiest ways to find high dividend Singapore stocks.

Fundamental Analysis

Fundamental analysis is a method of stock selection based on the underlying strength of a company’s business and its prospects. It involves analyzing the company’s financial statements (balance sheet, income statement, cash flow statement, etc.) to try and understand its growth potential, risk profile, and future outlook.

To find high dividend Singapore stocks, you have to choose a company with a strong fundamental profile. It’s mean they will have a competitive advantage in its industry, which will help it maintain or increase its profit margins and cash flows. This is a sign that the company is growing and has a strong footing in the market.

You can analyze a company using a handful of fundamental ratios such as the price-to-earnings ratio (PE), price-to-book ratio (PB), dividend yield, and return on equity (ROE). These ratios will provide you with an idea of the company’s valuation, its earnings and dividend yield, and the amount of cash it is returning to shareholders.

Singapore Exchange’s DRIP

The SGX DRIP is a dividend reinvestment program run by Singapore Exchange (SGX). The SGX DRIP allows investors to reinvest their dividends in more stocks on SGX, which could be a great option if you are looking to build a diversified portfolio of high dividend stocks.

There are currently over 70 stocks on SGX that are eligible for the DRIP. The stocks in the SGX DRIP have higher payout ratios and are more likely to pay dividends consistently. The stocks in the DRIP are also typically trading at a lower price than their net asset value (NAV), which means users will be able to purchase more units for the same amount of cash.

The SGX DRIP is a great way to build a diversified portfolio of high dividend stocks, but keep in mind that dividends from stocks on the DRIP cannot be withdrawn. If you want to withdraw any money from a DRIP, you would need to sell the stocks first.

Exchange Traded Funds (ETF)

Exchange traded funds (ETFs) are baskets of stocks that are traded on public stock exchanges. They are managed by fund managers who aim to track certain indices. ETFs are a good way to invest in a wide range of stocks in one go.

Many ETFs in Singapore target dividend-paying stocks, which allows you to invest in a basket of high dividend stocks in one go. You can use online tools, such as our research portal MoneySmart, to find ETFs that are aligned with your investment goals.

Making sure the ETF has a low expense ratio is important because it determines the overall management costs. A lower cost will mean you can earn more from your investment over time.

Singapore High Dividend Yield Index (SDYI)

The Singapore High Dividend Yield Index (SDYI) is a stock index that tracks companies that have a higher payout ratio. Investors can use this index to find high dividend stocks in Singapore, but keep in mind that these stocks are generally riskier.

The companies on the index are expected to have high revenue growth, but they may also be more volatile as they payout more cash to shareholders. Therefore, the SDYI index is a good option if you are willing to accept higher risk in exchange for higher dividends.

Getting High Dividend Singapore Stocks

Dividend stocks are a popular investment strategy and a great way to passively earn income from your investments. There are a lot of ways to find high dividend stocks in Singapore. You can use the SGX DRIP to reinvest dividends in more stocks, or you can use the SDYI index to find companies with high payouts.

If you want to diversify your portfolio and get more out of your dividend stocks, you could also look into ETFs that track the SDYI index. These are just a few strategies for finding high dividend Singapore stocks.


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