Yahoo Finance 4 Singapore Companies with Dividend Yields Above 5%: Are They Hidden Gems?
I am sure many of you have enjoyed playing treasure hunts.
The thrill of discovering something hidden, along with the promise of an attractive reward, can set the adrenaline pumping.
The same can be said for the hunt for hidden and possibly undiscovered gems on the Singapore stock market.
There are a handful of companies that pay out a dividend yield exceeding 5% but which may be under the radar.
It’s up to you to decide if these companies may be gems in the rough, or if they may end up as value traps.
Here are four companies sporting dividend yields above 5% that you may think of including in your stocks watchlist.
Fu Yu Corporation Ltd (SGX: F13)
Fu Yu provides services for the manufacture of precision plastic components and the fabrication of precision moulds and dies with manufacturing facilities in Singapore, Malaysia, and China.
The group is now one of the largest manufacturers of high-precision plastic parts and moulds in Asia.
Fu Yu reported a sparkling set of earnings for its fiscal 2022’s first half (1H2022).
Revenue surged 73% year on year to S$121.8 million with gross profit rising 25.4% year on year to S$21 million.
Net profit improved 23.4% year on year to S$10.9 million.
The business also generated a healthy free cash flow of S$2.2 million for 1H2022.
Fu Yu is completing its redevelopment project for its new smart factory in the current quarter. This building will elevate the company’s profile as an advanced solutions provider.
The group declared an interim dividend of S$0.004 for 1H2022, taking the trailing 12-month dividend to S$0.0165.
Fu Yu’s shares offer a trailing dividend yield of 6.3%.
NetLink NBN Trust (SGX: CJLU)
NetLink NBN Trust designs, builds, owns and operates the fibre infrastructure for Singapore’s Next Generation Nationwide Broadband Network (NBN).
The network provides nationwide internet coverage to residential and non-residential premises within the island.
For its fiscal 2022 (FY2022) ended 31 March 2022, NetLink NBN Trust reported a 2.5% year on year increase in revenue to S$377.6 million.
The better revenue was due to a higher number of connections, with non-residential fibre connections rising from 48,100 in FY2021 to 50,300 in FY2022.
Despite net profit dipping by 3.7% year on year to S$91.3 million, the group’s distribution per unit (DPU) inched up 1% year on year to S$0.0513.
The fibre provider’s units provide a 5.5% historical distribution yield.
NetLink NBN Trust is poised to benefit from growth opportunities arising from the digital economy, Singapore’s 5G rollout and the nation’s commitment to its smart city initiatives.
HRNetGroup Ltd (SGX: CHZ)
HRNetGroup is a leading recruitment and staffing firm with over 900 consultants across 13 Asian cities.
The group owns and manages popular brands such as HRnetOne, RecruitFirst, PeopleFirst, and PeopleSearch.
HRNetGroup reported an encouraging set of earnings for 1H2022, with revenue rising 14.2% year on year to S$314.2 million.
There was broad-based revenue growth across its two key divisions – professional recruitment and flexible staffing.
Flexible staffing, which made up close to 83% of the group’s revenue, saw revenue rise 13.2% year on year to S$259.8 million.
The group’s underlying net profit jumped by 36.2% year on year to S$42.6 million.
An interim dividend of S$0.0213 was declared, taking the trailing 12-month dividend to S$0.0613.
The trailing dividend yield for HRNetGroup’s shares stood at 7.7%.
The group’s strong free cash flow generation of S$33 million for 1H2022 can more than cover the interim dividend amount of S$21.3 million.
Delfi Ltd (SGX: P34)
Delfi manufactures and distributes branded consumer products sold in over 17 countries including Singapore, Malaysia, Hong Kong, Thailand, and Australia, to name a few.
It manages an established portfolio of chocolate confectionary brands such as SilverQueen and Ceres which are household brands in Indonesia.
As COVID restrictions eased and consumer sentiment improved, Delfi also reported a strong 1H2022.
Total revenue jumped 17% year on year to US$246.3 million while gross margin improved by 0.4 percentage points to 29.4%.
Net profit surged by 57.6% year on year to US$19.4 million.
The group also generated US$16.9 million of free cash flow and declared an interim dividend of US$0.0158 (around S$0.0218), its highest since 2014.
Delfi paid out a total final and special dividend of US$0.0156 last year, taking the trailing 12-month dividend to US$0.0314 or around S$0.0433.
The chocolate manufacturer’s shares offer a trailing 12-month dividend yield of 5.6%.
Delfi continues to develop new products that will appeal to Generation Z and millennials along with flavours and packaging designs that will attract this group of consumers.
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Disclaimer: Royston Yang owns shares of NetLink NBN Trust.
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