SG Market Dividend Stocks - OCBC Investment 2018-08-08: Stable Is The New Sexy

SG Market - OCBC Investment Research 2018-08-08: Stable Is The New Sexy CAPITALAND LIMITED SGX:C31 DBS GROUP HOLDINGS LTD SGX:D05 FRASERS CENTREPOINT TRUST SGX:J69U MAPLETREE NORTH ASIA COMM TR SGX:RW0U

SG Market - Stable Is The New Sexy; Do not ignore high dividend stocks.

  • Do not ignore high dividend stocks.
  • STI average yield of 3.9%.
  • Consistent and rising trend.



Flight to quality and safety

  • Most equity markets have erased gains for the year following uncertainty over escalating trade tensions and higher tariffs. In the current risk off environment, some investors have been gravitating towards higher dividend yielding blue chips.
  • The Straits Times Index fell 6.2% YTD to this year’s low in early July 2018. Since then, the index has recovered some grounds and is now up 4.6% from recent low in July (see The Straits Times Index Constituents Performance in July 2018). This trend is also aptly captured in the banking sector, where the average price decline was -2.7% in Jul, but stocks have rebounded and are currently up an average of 6.5% from recent lows. This is similarly seen for most of the STI 30 stocks.
  • At current valuation, the STI is trading at 13.4x FY18 and 12.4x FY19 earnings, with price-book of 1.1x and dividend yield of 3.9%.
  • Although the SGD has weakened in recent months against the USD to current levels of 1.368, over a 5-year period, the average is fairly stable at around 1.34. With a stable SGD and healthy dividend of 3.9%, it warrants a re-look at some of the high dividend yielding stocks.



~ SGinvestors.io ~ Where SG investors share

Christmas came early…



Ocean 11

  • We combed through our coverage list and selected high dividend stocks based on several factors including consistent and sustainable dividends in the past five years, dividend yield of > 3%, and with same or higher dividend payout projected for FY18. From our coverage universe, we identified 11 stocks that met our stipulated conditions. Of these, 10 are BUY-rated, with the exception of SATS Ltd which is currently HOLD-rated.
  • NetLink NBN Trust has a short trading history since it was listed in 2017, but we have opted to include NetLink NBN Trust as it is a defensive company with the potential for good, consistent dividend payout. About 90% of its revenue is based on long-term contracts. At current price, the dividend yield is 6.0%.
  • From the list, 10 stocks are BUY-rated and these are CapitaLand, DBS, Frasers Centrepoint Trust, Mapletree North Asia Commercial Trust, Singapore Telecommunications, NetLink NBN Trust, Singapore Exchange, Singapore Technologies Engineering, United Overseas Bank and Yangzijiang Shipbuilding Holdings Ltd.



Consistent dividend payout in the last 5 years

Company FY18(F) FY17 FY16 FY15 FY14
CAPITALAND LIMITED (SGX:C31)  Capitaland (SGX:C31) Share Price  Capitaland (SGX:C31) Target Price  Capitaland (SGX:C31) Analyst Reports  Capitaland (SGX:C31) Corporate Actions  Capitaland (SGX:C31) Announcements  Capitaland (SGX:C31) Latest News  Capitaland (SGX:C31) Blog Articles 12.00 12.00 10.00 9.00 9.00
* DBS GROUP HOLDINGS LTD (SGX:D05)  DBS (SGX:D05) Share Price  DBS (SGX:D05) Target Price  DBS (SGX:D05) Analyst Reports  DBS (SGX:D05) Corporate Actions  DBS (SGX:D05) Announcements  DBS (SGX:D05) Latest News  DBS (SGX:D05) Blog Articles 120.00 93.00 60.00 60.00 58.00
FRASERS CENTREPOINT TRUST (SGX:J69U)  Frasers Centrepoint Trust (SGX:J69U) Share Price  Frasers Centrepoint Trust (SGX:J69U) Target Price  Frasers Centrepoint Trust (SGX:J69U) Analyst Reports  Frasers Centrepoint Trust (SGX:J69U) Corporate Actions  Frasers Centrepoint Trust (SGX:J69U) Announcements  Frasers Centrepoint Trust (SGX:J69U)Latest News  Frasers Centrepoint Trust (SGX:J69U) Blog Articles 12.17 11.90 11.76 11.61 11.19
MAPLETREE NORTH ASIA COMM TR (SGX:RW0U)  Mapletree North Asia Commercial Trust (SGX:RW0U) Share Price  Mapletree North Asia Commercial Trust (SGX:RW0U) Target Price  Mapletree North Asia Commercial Trust (SGX:RW0U) Analyst Reports  Mapletree North Asia Commercial Trust (SGX:RW0U) Corporate Actions  Mapletree North Asia Commercial Trust (SGX:RW0U) Announcements  Mapletree North Asia Commercial Trust (SGX:RW0U)Latest News  Mapletree North Asia Commercial Trust (SGX:RW0U) Blog Articles 7.48 7.34 7.25 6.54 6.27
DBS GROUP HOLDINGS LTD (SGX:D05)  DBS (SGX:D05) Share Price  DBS (SGX:D05) Target Price  DBS (SGX:D05) Analyst Reports  DBS (SGX:D05) Corporate Actions  DBS (SGX:D05) Announcements  DBS (SGX:D05) Latest News  DBS (SGX:D05) Blog Articles 20.50 17.50 17.50 17.50 16.80
** NETLINK NBN TRUST (SGX:CJLU)  NetLink Trust (SGX:CJLU) Share Price  NetLink Trust (SGX:CJLU) Target Price  NetLink Trust (SGX:CJLU) Analyst Reports  NetLink Trust (SGX:CJLU) Corporate Actions  NetLink Trust (SGX:CJLU) Announcements  NetLink Trust (SGX:CJLU) Latest News  NetLink Trust (SGX:CJLU) Blog Articles 3.24 n.a. n.a. n.a. n.a.
SINGAPORE EXCHANGE LIMITED (SGX:S68)  SGX (SGX:S68) Share Price  SGX (SGX:S68) Target Price  SGX (SGX:S68) Analyst Reports  SGX (SGX:S68) Corporate Actions  SGX (SGX:S68) Announcements  SGX (SGX:S68) Latest News  SGX (SGX:S68) Blog Articles 30.00 28.00 28.00 28.00 28.00
SINGAPORE TECH ENGINEERING LTD (SGX:S63)  ST Engineering (SGX:S63) Share Price  ST Engineering (SGX:S63) Target Price  ST Engineering (SGX:S63) Analyst Reports  ST Engineering (SGX:S63) Corporate Actions  ST Engineering (SGX:S63) Announcements  ST Engineering (SGX:S63) Latest News  ST Engineering (SGX:S63) Blog Articles 15.00 15.00 15.00 15.00 15.00
*** SATS LTD. (SGX:S58)  SATS (SGX:S58) Share Price  SATS (SGX:S58) Target Price  SATS (SGX:S58) Analyst Reports  SATS (SGX:S58) Corporate Actions  SATS (SGX:S58) Announcements  SATS (SGX:S58) Latest News  SATS (SGX:S58) Blog Articles 18.00 17.00 15.00 14.00 13.00
UNITED OVERSEAS BANK LTD (SGX:U11)  UOB (SGX:U11) Share Price  UOB (SGX:U11) Target Price  UOB (SGX:U11) Analyst Reports  UOB (SGX:U11) Corporate Actions  UOB (SGX:U11) Announcements  UOB (SGX:U11) Latest News  UOB (SGX:U11) Blog Articles 100.00 100.00 70.00 90.00 75.00
YANGZIJIANG SHIPBLDG HLDGS LTD (SGX:BS6)  Yangzijiang (SGX:BS6) Share Price  Yangzijiang (SGX:BS6) Target Price  Yangzijiang (SGX:BS6) Analyst Reports  Yangzijiang (SGX:BS6) Corporate Actions  Yangzijiang (SGX:BS6) Announcements  Yangzijiang (SGX:BS6) Latest News  Yangzijiang (SGX:BS6) Blog Articles 4.00 4.50 4.00 4.50 5.50
Notes: Dividends In S cents
* FY17 dividend payout of S$1.43 if special dividend of 50 cents were included
** FY18 is for period of 19 June 2017 to 31 Mar 2018. The trust was listed in 2017.
*** HOLD rating
Source: Financial reports from the above companies



Fair Value Estimates and Upside

Company Last Done
($)
FV
($)
Upside
(%)
Rating DPS
(cents)
Yield (%)
CAPITALAND LIMITED (SGX:C31)  Capitaland (SGX:C31) Share Price  Capitaland (SGX:C31) Target Price  Capitaland (SGX:C31) Analyst Reports  Capitaland (SGX:C31) Corporate Actions  Capitaland (SGX:C31) Announcements  Capitaland (SGX:C31) Latest News  Capitaland (SGX:C31) Blog Articles 3.260 4.26 30.7% BUY 12.00 3.7%
DBS GROUP HOLDINGS LTD (SGX:D05)  DBS (SGX:D05) Share Price  DBS (SGX:D05) Target Price  DBS (SGX:D05) Analyst Reports  DBS (SGX:D05) Corporate Actions  DBS (SGX:D05) Announcements  DBS (SGX:D05) Latest News  DBS (SGX:D05) Blog Articles 26.790 31.83 18.8% BUY 120.00 4.5%
FRASERS CENTREPOINT TRUST (SGX:J69U)  Frasers Centrepoint Trust (SGX:J69U) Share Price  Frasers Centrepoint Trust (SGX:J69U) Target Price  Frasers Centrepoint Trust (SGX:J69U) Analyst Reports  Frasers Centrepoint Trust (SGX:J69U) Corporate Actions  Frasers Centrepoint Trust (SGX:J69U) Announcements  Frasers Centrepoint Trust (SGX:J69U)Latest News  Frasers Centrepoint Trust (SGX:J69U) Blog Articles 2.220 2.49 12.2% BUY 12.17 5.5%
MAPLETREE NORTH ASIA COMM TR (SGX:RW0U)  Mapletree North Asia Commercial Trust (SGX:RW0U) Share Price  Mapletree North Asia Commercial Trust (SGX:RW0U) Target Price  Mapletree North Asia Commercial Trust (SGX:RW0U) Analyst Reports  Mapletree North Asia Commercial Trust (SGX:RW0U) Corporate Actions  Mapletree North Asia Commercial Trust (SGX:RW0U) Announcements  Mapletree North Asia Commercial Trust (SGX:RW0U)Latest News  Mapletree North Asia Commercial Trust (SGX:RW0U) Blog Articles 1.130 1.42 25.7% BUY 7.48 6.6%
DBS GROUP HOLDINGS LTD (SGX:D05)  DBS (SGX:D05) Share Price  DBS (SGX:D05) Target Price  DBS (SGX:D05) Analyst Reports  DBS (SGX:D05) Corporate Actions  DBS (SGX:D05) Announcements  DBS (SGX:D05) Latest News  DBS (SGX:D05) Blog Articles 3.200 4.10 28.1% BUY 20.50 6.4%
NETLINK NBN TRUST (SGX:CJLU)  NetLink Trust (SGX:CJLU) Share Price  NetLink Trust (SGX:CJLU) Target Price  NetLink Trust (SGX:CJLU) Analyst Reports  NetLink Trust (SGX:CJLU) Corporate Actions  NetLink Trust (SGX:CJLU) Announcements  NetLink Trust (SGX:CJLU) Latest News  NetLink Trust (SGX:CJLU) Blog Articles 0.775 0.90 16.1% BUY 4.62 6.0%
SINGAPORE EXCHANGE LIMITED (SGX:S68)  SGX (SGX:S68) Share Price  SGX (SGX:S68) Target Price  SGX (SGX:S68) Analyst Reports  SGX (SGX:S68) Corporate Actions  SGX (SGX:S68) Announcements  SGX (SGX:S68) Latest News  SGX (SGX:S68) Blog Articles 7.420 8.32 12.1% BUY 30.00 4.0%
SINGAPORE TECH ENGINEERING LTD (SGX:S63)  ST Engineering (SGX:S63) Share Price  ST Engineering (SGX:S63) Target Price  ST Engineering (SGX:S63) Analyst Reports  ST Engineering (SGX:S63) Corporate Actions  ST Engineering (SGX:S63) Announcements  ST Engineering (SGX:S63) Latest News  ST Engineering (SGX:S63) Blog Articles 3.410 3.90 14.4% BUY 15.00 4.4%
SATS LTD. (SGX:S58)  SATS (SGX:S58) Share Price  SATS (SGX:S58) Target Price  SATS (SGX:S58) Analyst Reports  SATS (SGX:S58) Corporate Actions  SATS (SGX:S58) Announcements  SATS (SGX:S58) Latest News  SATS (SGX:S58) Blog Articles 5.240 5.39 2.9% HOLD 18.00 3.4%
UNITED OVERSEAS BANK LTD (SGX:U11)  UOB (SGX:U11) Share Price  UOB (SGX:U11) Target Price  UOB (SGX:U11) Analyst Reports  UOB (SGX:U11) Corporate Actions  UOB (SGX:U11) Announcements  UOB (SGX:U11) Latest News  UOB (SGX:U11) Blog Articles 28.020 32.09 14.5% BUY 100.00 3.6%
YANGZIJIANG SHIPBLDG HLDGS LTD (SGX:BS6)  Yangzijiang (SGX:BS6) Share Price  Yangzijiang (SGX:BS6) Target Price  Yangzijiang (SGX:BS6) Analyst Reports  Yangzijiang (SGX:BS6) Corporate Actions  Yangzijiang (SGX:BS6) Announcements  Yangzijiang (SGX:BS6) Latest News  Yangzijiang (SGX:BS6) Blog Articles 0.910 1.18 29.7% BUY 4.00 4.4%






Carmen Lee OCBC Investment Research | https://www.iocbc.com/ 2018-08-08
SGX Stock Analyst Report BUY Maintain BUY 4.260 Same 4.260
BUY Maintain BUY 31.830 Same 31.830
BUY Maintain BUY 2.490 Same 2.490
BUY Maintain BUY 1.420 Same 1.420



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