Yahoo Finance 3 Dividend-Paying Singapore Stocks That Can Boost Your CPF Returns
Singaporeans understand that the Central Provident Fund (CPF) scheme is a great way to save for your retirement.
These savings are invested in Special Singapore Government Securities that are guaranteed by the government, giving you a safety net for your retirement funds.
Your CPF Ordinary Account (OA) provides a nearly risk-free interest rate of 2.5% per annum.
However, with Singapore’s core inflation averaging around 4% last year, your OA savings risk losing their purchasing power.
The good news is that you can invest your CPF OA balance to enjoy a higher return.
Here are three dividend-paying Singapore stocks that can help to give your OA account a boost to beat inflation.
Civmec Limited (SGX: P9D)
Civmec is an Australian integrated construction and engineering services provider that caters to the energy, resources, infrastructure, and marine sectors.
The group recently released an encouraging set of earnings for its fiscal 2023’s first half (1H FY2023).
Revenue crept up 7.6% year on year to A$418.9 million while net profit jumped 25.1% year on year to S$28.3 million.
This good performance represents the seventh consecutive half-year that saw a year-on-year net profit increase.
Civmec also reported a positive operating cash flow of A$67.2 million, reversing the negative operating cash flow of A$20.6 million in 1H FY2022.
Free cash flow for 1H FY2023 came in at A$60.4 million.
In light of the good results, Civmec has doubled its interim dividend from A$0.01 to A$0.02.
Coupled with its FY2022 final dividend of A$0.02, the total trailing dividend stands at A$0.04, giving the group’s shares a trailing 12-month dividend yield of 5.6%.
Civmec saw its order book expand by 13.4% to A$1.2 billion from A$1 billion six months ago.
The group sees good visibility on upcoming client projects and is targeting steady and sustainable growth for both its top and bottom lines.
According to publicly available information, Civmec’s total addressable market stands at around ~A$330 billion across the sectors it operates throughout Australia up till FY2025.
Thomson Medical Group (SGX: A50)
If you’re looking for a recession-resistant sector, look no further than healthcare.
Thomson Medical Group, or TMG, is one of the largest private healthcare services providers for women and children in Singapore.
The group owns and operates Thomson Medical Centre along with a network of specialist clinics offering diagnostics, health screening, dentistry and gynaecological services.
For 1H FY2023, revenue jumped 26.6% year on year to S$184 million.
Revenue growth was driven by expanded capacity in Kuala Lumpur along with project-related services.
Operating profit jumped 46.4% year on year while net profit soared 82.6% year on year to S$22.8 million.
For the period, TMG also generated a free cash flow of S$46.1 million, more than double the S$19.6 million that was churned out a year ago.
For FY2022, the board paid out a special dividend of S$0.00115, more than seven times the S$0.00015 it paid out in FY2021.
TMG’s shares offer a trailing dividend yield of 1.6%.
Dr Melvin Heng, CEO of TMG, believes that the group will continue to do well as deferred elective procedures are now being performed.
Japan Foods Holdings (SGX: 5OI)
Japan Foods is a leading Japanese restaurant chain in Singapore and operates 60 restaurants under brands such as “Ajisen Ramen” and “Menya Musashi” as of 30 September 2022.
With the recovery from pandemic restrictions, the group reported a much healthier top and bottom line for 1H FY2023.
Revenue surged 79% year on year to S$38 million with gross profit climbing nearly 81% year on year to S$32.2 million.
Net profit clocked in at S$2.3 million, reversing the net loss of S$1.6 million in 1H FY2022.
Japan Foods doubled its interim dividend from S$0.005 to S$0.01 in light of these strong numbers.
Together with the group’s FY2022 final dividend of S$0.0135, the trailing 12-month dividend stood at S$0.0235, giving the food and beverage operator’s shares a trailing dividend yield of 5.6%.
The group continued to expand its Halal franchise with the introduction of its latest Halal brand “Kyoto Shokudo” in October last year.
With this opening, Japan Foods’ total Halal brand offerings increase to 13, up from just six as of 1H FY2022.
In addition, the easing of the pandemic has also allowed the group to resume its overseas expansion with the debut of its first Japanese restaurant in Tokyo back in August 2022.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
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