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Investors often gravitate towards dividend stocks for their potential to provide a reliable income stream. However, it's crucial to examine the sustainability of these dividends. A high payout ratio, such as that seen with First Sponsor Group, might suggest that a company is distributing more money to shareholders than it can afford, which could jeopardize future payouts. Today, we will explore two stocks on the SGX, highlighting one attractive option and cautioning against another where such risks are evident.
Top 10 Dividend Stocks In Singapore
| Name | Dividend Yield | Dividend Rating |
| BRC Asia (SGX:BEC) | 7.41% | ★★★★★☆ |
| China Sunsine Chemical Holdings (SGX:QES) | 6.35% | ★★★★★☆ |
| Civmec (SGX:P9D) | 5.88% | ★★★★★☆ |
| Singapore Exchange (SGX:S68) | 3.61% | ★★★★★☆ |
| Multi-Chem (SGX:AWZ) | 8.71% | ★★★★★☆ |
| UOB-Kay Hian Holdings (SGX:U10) | 6.81% | ★★★★★☆ |
| UOL Group (SGX:U14) | 3.84% | ★★★★★☆ |
| Bumitama Agri (SGX:P8Z) | 6.82% | ★★★★★☆ |
| Singapore Airlines (SGX:C6L) | 7.01% | ★★★★★☆ |
| Sing Investments & Finance (SGX:S35) | 6.00% | ★★★★☆☆ |
Click here to see the full list of 20 stocks from our Top SGX Dividend Stocks screener.
We'll examine a selection from our screener results and one of the companies to potentially avoid.
Top Pick
Civmec
Simply Wall St Dividend Rating: ★★★★★☆
Overview: Civmec Limited, an investment holding company, offers construction and engineering services across sectors like energy, resources, infrastructure, and marine and defense in Australia, with a market capitalization of approximately SGD 428.91 million.
Operations: The company's revenue is derived from three primary sectors: energy (A$46.02 million), resources (A$752.82 million), and infrastructure, marine & defense (A$105.52 million).
Dividend Yield: 5.9%
Civmec, with a dividend yield of 5.88%, offers a sustainable payout due to its low payout ratio of 45.4% and cash payout ratio of 27%, ensuring dividends are well-covered by both earnings and cash flows. Unlike some peers with risky high payout ratios, Civmec maintains financial health, crucial for ongoing dividend reliability. However, its yield is below the top quartile in Singapore's market, suggesting room for improvement in attractiveness compared to the highest payers.
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Get an in-depth perspective on Civmec's performance by reading our dividend report here.
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Our valuation report here indicates Civmec may be undervalued.
One To Reconsider
First Sponsor Group
Simply Wall St Dividend Rating: ★☆☆☆☆☆
Overview: First Sponsor Group Limited is an investment holding company that focuses on investing in, developing, and selling residential and commercial properties across the People’s Republic of China, Europe, and other international markets, with a market capitalization of approximately SGD 1.22 billion.