Many consider Singapore’s stock exchange less exciting compared to the monster rallies often seen in the US market. However, it stands out for its attractive dividend opportunities, thanks to its renowned no dividend tax policy. This has successfully attracted a wave of dividend harvesting investors.
In January 2025, 4 stocks and 1 ETF will be paying out dividends on the Singapore stock exchange. While 2 have passed their ex-dates to be eligible for the January dividends, the rest still offer a decent yield and an opportunity to rack up on the last bit of cash flow.
That said, we’ve observed that overall business performance has not fully recovered to pre-covid levels, leading to an overall drop in revenue and net income, as summarised under each company. Consequently, the dividends distributed have largely experienced a decline and this will likely persist as the macroeconomic environment remains uncertain.
ESR-LOGOS REIT (SGX: J91U)
ESR-LOGOS REIT is a Singapore-based real estate investment trust (REIT) focusing on logistics and industrial properties across the Asia-Pacific region. The REIT’s net income remains in negative territory due to divestments of non-core assets amidst the previously higher interest rate environment. These asset sales have allowed the REIT to recycle cash for redeployment and manage its financial position.
Recently, it bought a distribution centre in Japan and acquired a 51% interest in a warehouse in Singapore for a total of S$772 million. Additionally, the business is also increasingly turning towards data centers with some projects listed in its pipeline.
Its net income remains in negative territory, which would be a cause of concern for investors and we recommend exercising caution before investing in ESR-LOGOS REIT. While recent moves have not yielded results and there are uncertainty regarding its capital recycling, the REIT does present an opportunity for dividend investors, offering a yield of 7.23% for 2024, with a payout of S$0.018. Its Dividend ex-date is 7 November 2024 and dividend payment date is schedule for 8 January 2025, with a dividend payout of S$0.00044.
Looking ahead, the business seems to still have some room for asset reallocation and cash recycling through the next year which means the stock price may not experience a huge appreciation due to continuation in the dumping of assets.
Medinex Limited (SGX: OTX):
Medinex is a Singapore-listed company providing medical support services, including business support, regulatory compliance, and medical space management. It caters primarily to healthcare professionals and medical clinics, assisting them in operational and administrative functions. There was a general increase in demand for medical services and business support services which led to an increase in revenue and net income for its trailing twelve month earnings.
The business’s FY2024 earnings reported a drop in revenue and net income due to the decrease in demand and an increase in other expense. The subsidiary disposal, writing off of bad debt and goodwill impairment caused the spike in other expense. We expect this to be one time expenses and the business’s operations should remain stable as it continues to show an ability in generating free cash flow as its TTM earnings is already turning up but we will need to see the momentum continue for the rest of the FY. The Dividend ex-date is 6 January 2025 and the dividend payment date is on 20 January 2025 with a payment of S$0.008 at 3.73% yield.
CDW Holding Limited (SGX: BXE)
CDW Holding is a Singapore-listed investment holding company with subsidiaries engaged in the manufacture and sale of precision components for mobile communication equipment, game consoles, and office equipment. Its operations span across China, Japan, and other parts of Asia.
The company attributed its business slowdown to a 38% decline in sales of a number of its products in its core LCD Backlight units in 1H2024. This has led to the closedown of one of its factories in Wuxi China. Overall, there’s a weak demand for this product as the Group’s customers are scale back orders amid a global decline in electronics spending.
Additionally, the company cited geopolitical tensions and global reallocation of offices and businesses as factors contributing to a temporary decline in demand for its products. For FY 2023, sales across its products and markets dropped by 26%, significantly impacting free cash flow, which dropped by more than 50%. We do recommend exercising caution before investing in a stock solely for its dividends even if the dividend yield seems high.
The Dividend ex-date is 24 December 2024, and the dividend payment date is 22 January 2025, with a dividend payment of USD$0.012, offering a 10.46% yield.
Geo Energy Resources Limited (SGX: RE4)
Geo Energy is a Singapore-listed coal mining group, primarily operating in Indonesia. The company focuses on the production and sale of thermal coal, supplying to power plants and industrial end-users. The decrease in sales was driven by a combination of falling sales volume and lower average selling price.
While concerns about renewable energy replacing coal persist, the company forecasts that coal will continue to play a vital role in energy production. This outlook is supported by China’s record-high coal imports for 2024, despite a rise in renewable energy, highlighting coal’s ongoing importance in energy production.
Adverse weather conditions have caused some disruption in coal transportation but management remains confident that coal prices will stabilise and demand will be even stronger with the advent of data centres. However, it’s worth noting that the management had mentioned that it is currently operating in mines with higher strip ratio, meaning increased costs due to the removal of more waste material from mining before resource extraction. This will likely to continue to impact the business’s growth and margins, which could affect its stock price inadvertently.
Its Dividend ex-date is 16 December 2024 and dividend payment date is 8 January 2025, with a payment of S$0.012 at 4.53% yield for the full year.
Nikko AM Singapore STI ETF (SGX: G3B)
While not the only ETF paying out dividends in Jan 2025, we’ve included this in our primarily stocks-focused list as this exchange-traded fund (ETF) seeks to replicate the performance of the Straits Times Index (STI). This index comprises the top 30 companies listed on the Singapore Exchange by market capitalization, making it a noteworthy mention.
As of December 16, 2024, the fund’s net asset value (NAV) stood at SGD 3.9694, with a total fund size of approximately SGD 851 million. The ETF offers investors exposure to Singapore’s blue-chip companies and has a total expense ratio capped at 0.25% per annum. Its main holdings are Banks (DBS, OCBC and UOB) where they collectively make up 56% of the overall ETF weighting. This strong representation has contributed to its exceptional performance this year, with a YTD gain of about 19%.
All three banks have reported significant increases in net profits for the third quarter of 2024. DBS achieved a record net profit of S$3.03 billion, a 15% year-on-year increase, driven by higher fee income from wealth management and strong trading income. OCBC’s net profit rose by 9% to S$1.97 billion, surpassing analyst expectations, with improved performance from wealth management and insurance income. UOB reported a 16% increase in net profit to S$1.61 billion, attributed to robust trading and investment activities. The banks also offer a decent dividend yield of 5.3% for OCBC, 4.7% for DBS and 4.9% for UOB.
As G3B consists of other businesses that are underperforming compared to the banks, its dividend yield is naturally lower at 2.22%. The Dividend ex-date is 2 January 2025, with dividend payment date on 15 January 2025.
Conclusion
The January 2025 payouts from the highlighted stocks and ETF present a mix of opportunities, albeit with caution warranted in light of varying business performances and broader economic uncertainties. While some companies, like Geo Energy and CDW Holding, face challenges such as declining demand and rising costs, others like ESR-LOGOS REIT and Medinex demonstrate potential for recovery and stability. Meanwhile, the Nikko AM Singapore STI ETF showcases the strength of Singapore’s blue-chip banking sector, offering a balanced exposure with consistent dividend yields.
As always, investors should carefully evaluate each company’s financial health and growth prospects, balancing the allure of attractive dividend yields with potential risks. The evolving macroeconomic environment and sector-specific headwinds underscore the importance of a diversified and informed investment approach.
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