3 Singapore Dividend Growth Stocks to Watch for 2021

Investors tend to be segregated investors into two camps — growth versus income.

Growth investors look for businesses that are growing at above-average rates.

As these businesses grow, their share prices should also rise in tandem, providing capital gains for investors savvy enough to hop on the bandwagon.

Income investors are typically seen as favouring companies that pay dividends.

Such investors place greater emphasis on companies with healthy free cash flow generation and large cash balances.

These attributes provide more certainty that the dividend stream can continue to provide a passive flow of income.

For myself, I belong to neither camp.

Instead, I propose a third category.

These include companies that offer both growth and dividends, thus allowing me to enjoy the best of both worlds.

Here are three stocks that can offer this tantalising combination.

Boustead Singapore Limited (SGX: F9D)

Boustead Singapore Limited, or BSL, is an engineering conglomerate that operates four divisions — energy-related engineering, real estate solutions, geo-spatial technology, and healthcare.

BSL was founded in 1828 and is the second-oldest company in Singapore.

Headed by CEO Wong Fong Fui, the group recently announced a stellar set of earnings.

Its real estate solutions arm, under separately-listed Boustead Projects Limited (SGX: AVM), had announced the setting up of a private investment fund known as Boustead Industrial Fund (BIF).

Due to the unlocking of its real estate portfolio’s value, BSL reported an exceptional gain of S$134.8 million, lifting its fiscal 2021’s (FY2021) net profit by more than three-fold to S$113.1 million.

Both its energy-related engineering and geospatial technology divisions also reported year on year increases in both revenue and profit before tax.

BIF can continue to unlock further value for BSL, albeit at a slower pace due to the disruption brought about by the pandemic.

The group also declared a final dividend of S$0.03 and a special dividend of S$0.04, bringing the FY2021 dividend to S$0.08.

BSL has a history of paying out steady dividends and has been consistently paying out a dividend since FY2010.

Singapore Exchange Limited (SGX: S68)

SGX operates Singapore’s sole stock exchange.

The group owns and operates a platform for the buying and selling of securities such as shares, bonds and derivatives.

SGX has a long track record of paying out quarterly dividends.

For its recent fiscal 2021 half-year (1H2021) results, the bourse operator reported a 9% year on year rise in revenue to S$521 million.

Net profit rose 12% year on year to S$240 million.

The group upped its quarterly dividend from S$0.075 to S$0.08.

Apart from its dependable dividends, SGX has also embarked on several growth initiatives that should lift both its top and bottom lines.

In late April, SGX added four new freight forwarding agreements and futures contracts to its suite of product offerings.

Such contracts offer clients more options for hedging the dry bulk freight segment.

The group also partnered with CNBC, the world’s top business and financial news network, to unveil the iEdge-CNBC China Growth Economy Index, an exchange-traded fund that tracks the performance of 50 China companies.

And in late May, SGX partnered with DBS Group (SGX: D05), Standard Chartered Bank (LON: STAN) and Temasek to set up a carbon exchange and marketplace called Climate Impact X to trade high-quality carbon credits.

Micro-Mechanics (Holdings) Ltd (SGX: 5DD)

Micro-Mechanics (Holdings) Ltd, or MMH, designs, manufactures and markets high precision tools and parts that are used in the semiconductor industry.

For the first nine months of its fiscal 2021, revenue rose 14.1% year on year to S$54.6 million while net profit jumped 24% year on year to S$13.3 million.

The pandemic has caused a surge in demand for electronic devices are more people telecommute and businesses digitalise.

According to data from the World Semiconductor Trade Statistics (WSTS), global semiconductor sales for both January and February this year rose 14% year on year to US$79.6 billion.

WSTS also expects semiconductor sales for 2021 to increase to US$488 billion.

This growth should bode well for MMH in the years to come.

The group has also paid an annual dividend every single year since its fiscal year 2006.

Can’t decide between growth or income? Now, you can enjoy the best of both worlds with our newest FREE report, 8 Singapore Stocks for Your Retirement Portfolio. You’ll discover 8 SGX stocks we believe can offer you strong capital growth and juicy dividend payouts. Click here to download the report.

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Disclaimer: Royston Yang owns shares of Boustead Singapore Limited, Singapore Exchange Limited and Micro-Mechanics (Holdings) Limited.

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