DBS Group Research Model Portfolio - Dividend (2016-03-17)

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DBS Group Research Model Portfolio - Dividend 

Income investing is part of your stock picking strategies. You look to include dividend stocks into your portfolio to provide a steady income stream.  

The Dividend portfolio gained 5.5% on an average return basis, underperforming the STI's 10% gain. ST Engineering and ARA Asset Management were the top performances in this category. We remove Mapletree Commercial Trust as the stock has exceeded our $1.40 TP with a 7.5% return. We also remove Ascendas REIT given its fairly limited upside to TP. We add Mapletree Logistics Trust as the trust returns to a growth path, offers a yield of 7.6% and a potential 17% upside to TP.

FRASERS CENTERPOINT LIMITED 

1. Strong earnings resilience amongst REITs with downside risk protection.
2. Upside to earnings growth from AEI on major asset (northpoint).
3. Yields of c.6% atttractive.

Company Guide:

• Frasers Centerpoint Ltd - DBS Research 2015-12-15: An Emerging Contender

MAPLETREE LOGISTICS TRUST 

• Acquisitions and developments to drive growth; completion of various AEIs to underpin medium-term growth

Company Guide:

• Ascendas REIT - DBS Vickers 2016-01-25: Bolstered By Its Australian Venture

VENTURE CORP 

• Attractive at 13x 1-year forward PER and c.6% yield. 
• Big beneficiary of strong USD as 99% of sale in USD to US and Europe while benefitting at the same time from weak Ringgit as 60% of manufacturing cost is based in Malaysia.

Company Guide:

• Venture Corporation - DBS Research 2016-02-26: Safe haven from weak Asian currencies

FRASERS CENTERPOINT TRUST 

1. Strong earnings resilience amongst REITs with downside risk protection. 
2. Upside to earnings growth from AEI on major asset (northpoint). 
3. Yields of 6.5% attractive. 

Company Guide:

• Frasers Centrepoint Trust - DBS Research 2016-01-06: Northern lights

SIA ENGINEERING

• Worst could be over on the earnings front. 
• Possibility of special dividends around the corner. Better entry point now. 

Company Guide:

• SIA Engineering - DBS Research 2016-02-02: Time for a re-look

SHENG SIONG GROUP 

• SSG is on track towards its 50-store target; margin expansion trend is performing to our expectations. 
• Dividend continues to be attractive at c.4% based on FY16F DPS of 3.6 Scts.  

Company Guide:

• Sheng Siong Group - DBS Research 2015-11-25: Still Going Strong

ST ENGINEERING

• Steady earnings and dividends provide safe haven in current uncertain and volatile market environment. 
• Final dividends to be announced soon. Smart city contracts may be upcoming.

Company Guide:

• ST Engineering - DBS Research 2016-02-29: Steady dividend outlook

ARA ASSET MANAGEMENT

• Attractive valuations and yield of c.4% to 5%.  
• ARA has S$150m war chest, and is well positioned to capture opportunities that may arise in 2016. 

Company Guide:

• ARA Asset Management - DBS Research 2016-02-05: On route to greater heights

Previous Report:

• DBS Group Research Model Portfolio - Dividend (2016-02-11)

Singapore Research Team DBS Vickers | http://www.dbsvickers.com/ 2016-03-17