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Earnings Season is Approaching: 4 Singapore Stocks That Could Increase Their Dividends

Singtel Comcentre
Singtel Comcentre

Time flies, and the next earnings season is fast approaching.

Several REITs will start reporting their earnings and business updates by the end of this month, followed by the blue-chip stocks in early May.

Income investors will be eagerly scrutinising the slew of results to see which companies have declared dividends.

What’s even better is if these stocks can increase their dividends so that these income investors enjoy a larger stream of passive income.

We highlight four Singapore stocks that could be the next in line to increase their dividends.

Boustead Singapore Limited (SGX: F9D)

Boustead Singapore Limited, or BSL, is a conglomerate with four key divisions – energy-related engineering, real estate, geospatial technology, and healthcare.

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The group has undertaken projects in 93 countries and territories globally.

BSL reported a sparkling set of earnings for its first half of fiscal 2024 (1H FY2024) ending 30 September 2023.

Revenue jumped 49% year on year to S$367.9 million with gross profit improving by 42% year on year to S$105.3 million.

Net profit adjusted for one-off items surged by 89% year on year to S$25.8 million.

The group’s free cash flow soared 135% year on year for 1H FY2024 to S$97.4 million.

BSL kept its interim dividend at S$0.015, unchanged from a year ago.

Back in early February, the group took its real estate arm, Boustead Projects, private with the group and its concert parties controlling 99.45% of the latter.

BSL can now recognise a higher share of profits from its increased ownership in its subsidiary.

Meanwhile, BSL also has a healthy engineering order backlog of S$433 million and S$120 million in deferred services backlog for its geospatial technology division.

Frasers Logistics & Commercial Trust (SGX: BUOU)

Frasers Logistics & Commercial Trust, or FLCT, is a logistics and commercial REIT with a portfolio of 108 properties in five countries.

The REIT’s assets under management stood at S$6.7 billion as of 31 December 2023.

FLCT announced an encouraging business update for the first quarter of fiscal 2024 (1Q FY2024).

Portfolio occupancy stood high at 95.8% and the portfolio also registered positive rental reversions of 18.2%.

The REIT is poised to benefit from the completion of its Ellesmere Port forward-funding project in the UK.

FLCT has another forward funding project Maastricht Logistics Development in the Netherlands that will be completed in 1H FY2025.

Elsewhere, the REIT also acquired an 89.9% interest in four properties in Germany that are expected to be accretive to distribution per unit (DPU) and net asset value (NAV).

As of 31 December 2023, FLCT had a low aggregate leverage of 30.7% with significant debt headroom of S$1.1 billion to carry out acquisitions.

NetLink NBN Trust (SGX: CJLU)

NetLink NBN Trust is part of the NetLink Group which designs, builds, owns, and operates the passive fibre network infrastructure of Singapore’s nationwide broadband network (NBN).

The group reported an encouraging set of earnings for the first nine months of fiscal 2024 (9M FY2024) ending 31 December 2023.

Revenue inched up 3.2% year on year to S$309.4 million because of higher connection revenue and higher installation-related revenue.

Net profit improved by 4% year on year for the period to S$85.1 million.

NetLink NBN Trust continues to see an increase in residential and non-residential connections that will power its revenue and DPU.

Residential connections stood at 1.5 million as of 31 December 2023, up from 1.49 million as of 31 March 2023.

Non-residential connections increased from 52,100 to 53,200 over the same period.

NetLink NBN Trust intends to improve its network reach and densification while exploring opportunities to invest in telecom infrastructure businesses overseas that generate stable cash flow.

The group saw its DPU rise slightly by 1.1% year on year to S$0.0265 for the first half of fiscal 2023 ending 30 September 2023.

Singtel (SGX: Z74)

Singtel is Singapore’s largest telecommunication company (telco) that provides a range of services including mobile, broadband, pay TV, and cybersecurity.

The telco reported a resilient performance for 9M FY2024 despite macroeconomic and foreign exchange headwinds.

Underlying net profit improved by 7% year on year with strong operating profit performance from its various growth engines.

Optus also saw its brand and subscriber metrics recovering well in the fourth quarter of fiscal 2024 (4Q FY2024).

Nxera, Singtel’s data centre business, is also rapidly scaling up with capital expenditures funded by a green loan and with KKR’s investment.

With these positive developments, the group is on track to pay out dividends in the upper range of its new dividend policy for FY2024.

Investors should also take heart in the telco’s Investor Day targets last year where CEO Yuen Kuan Moon identified several tailwinds to help Singtel grow.

The telco is also targeting a low double-digit return on invested capital (current FY2023: 8%) by FY2026.

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Disclosure: Royston Yang owns shares of Boustead Singapore, Frasers Logistics & Commercial Trust and NetLink NBN Trust.

The post Earnings Season is Approaching: 4 Singapore Stocks That Could Increase Their Dividends appeared first on The Smart Investor.