4 Crisis-Resilient Singapore Stocks That Continued Paying Dividends
It’s normal for the economy to experience boom and bust cycles.
When the economy does well, many businesses will ride the wave and report higher revenue and profits.
But when the macroeconomic horizon darkens, these same businesses may see a sharp fall in profits and cash flows.
If you want peace of mind, you should look for stocks that can weather these economic cycles and continue to do well.
Case in point: Several businesses continued paying out dividends through the pandemic and have carried on doing so up till the present.
Here are four stocks that we feel confident can continue to dish out dividends through good times and bad.
Boustead Singapore Limited (SGX: F9D)
Boustead Singapore Limited, or BSL, is a conglomerate with four divisions – energy engineering, real estate, geospatial, and healthcare.
The group boasts a long and solid track record of dividend payments throughout the years and has paid a dividend every single year without fail since it went public in 2003.
For its recent fiscal 2024 (FY2024) earnings ending 31 March 2024, the conglomerate saw its revenue jump 37% year on year to S$767.6 million.
Net profit climbed 42% year on year to S$64.2 million.
Core net profit, which adjusts for one-off items, doubled year on year from S$31.5 million to S$63.3 million.
BSL also generates consistent positive free cash flow which helps to keep its balance sheet strong and allows the group to carry on paying dividends through thick and thin.
For FY2024, free cash flow came in at S$91.8 million, 24% higher than the S$74 million churned out a year ago.
The board proposed a final dividend of S$0.04 for FY2024, taking the total dividend for the fiscal year to S$0.055, 37.5% higher than the S$0.04 paid out for FY2023.
The group’s engineering backlog stood at S$247 million at the end of FY2024 while its deferred services backlog for its geospatial division hit a record of S$129 million.
DBS Group (SGX: D05)
DBS is Singapore’s largest bank by market capitalisation.
The lender has been a dividend stalwart through tough times and has continued paying out dividends through the pandemic.
Even though Singapore’s central bank mandated that DBS reduce its dividend payments, the bank still paid out a bonus-adjusted full-year dividend of S$0.791 for 2020.
The core dividend per share increased to S$1.091 in 2021 and then to S$1.364 in 2022, showing that the bank could continue to pay out increasing dividends even during a crisis.
There was even a special dividend of S$0.455 declared in 2022 on top of the ordinary dividend.
Fast forward to the first quarter of 2024 (1Q 2024), and DBS has reported a sparkling set of earnings.
Total income rose 13% year on year to S$5.6 billion, buoyed by an 8% year-on-year increase in net interest income due to overall higher interest rates.
Net profit stood at a new record of S$2.96 billion, up 15% year on year.
The lender paid out a quarterly dividend of S$0.54 which was a 42% year-on-year jump from the previous year’s S$0.38.
CSE Global (SGX: 544)
CSE Global is a systems integrator that provides electrification, communications, and automation solutions across various industries.
The engineering firm has paid out a consistent dividend of S$0.0275 for the past five years (i.e. 2019 to 2023).
At a share price of S$0.44, this dividend gives CSE Global a trailing dividend yield of 6.3%.
The group provided an encouraging business update for 1Q 2024.
Revenue climbed nearly 24% year on year to S$197.5 million with all three divisions registering year-on-year revenue growth.
Order intake has also improved by 16.7% year on year to S$186.2 million, giving CSE Global an order book of S$719.3 million.
This order book was nearly 50% higher than the S$480.2 million that was reported in 1Q 2023.
The group intends to diversify into new markets that are driven by emerging trends in areas such as wind and solar systems, battery energy storage systems, and critical communications.
Acquisition remains a key growth strategy for CSE Global and the focus areas will be complementary and adjacent capabilities.
Haw Par Corporation (SGX: H02)
Haw Par is also a conglomerate and has four key divisions – healthcare (led by the globally recognised Tiger Balm brand), leisure, property, and investments.
The group has been a faithful payer of dividends through all types of economic situations.
During the Global Financial Crisis of 2008 to 2009, Haw Par continued to pay out an annual dividend of S$0.20 per share.
The business generates copious free cash flow every year and has dished out dividends from 2010 through 2023.
Haw Par increased its annual dividend to S$0.30 back in 2018 and also dished out a special dividend of S$0.85, bringing the total dividend to S$1.15 for that year.
For 2023, revenue increased by 27.4% year on year to S$232.1 million.
Net profit surged by 46% year on year to S$216.6 million as borders reopened and sporting events resumed.
The business generated a healthy positive free cash flow of S$54.9 million for 2023, more than double the S$21.2 million that was churned out in 2022.
2023’s total dividend was raised to S$0.40 from S$0.30 a year ago, representing an increase of 33% year on year.
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Disclosure: Royston Yang owns shares of Boustead Singapore and DBS Group.
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