Stocks on Singapore’s Straits Times Index (STI) are generally known for paying a relatively decent dividend. As of 29 December 2023, the STI’s dividend yield was 5.0%. Why we say this is relatively high is because other major country indexes, such as the Hang Seng Index (HSI) in Hong Kong or the S&P 500 index in the U.S. pay only about 4.0% and 1.6% currently.
While the dividends that STI pay are more attractive, this only paints half (or less) of the picture. This is because we’re not looking at the growth of the index – aka, its total returns that also include price appreciation. Again, if we look at the HSI or S&P 500, they have an annualised return of -5.8% and 15.7% in the past five years. This compares to the STI’s 5.3% annualised return in the same timeframe.
In summary, the S&P 500 may have outperformed the STI, but does not provide comparable dividend payouts each year. The Hang Seng Index, on the other hand, may be giving a slightly lower dividend payout, but has been plagued by negative performance in recent years.
Read Also: Guide To Dividend Investing In Singapore
Investors Who Benefit From Dividend Investing
When we embark on our investing journey, there are many strategies we can use to build our portfolio. For many in Singapore, dividend investing is an attractive and important way to generate a return. As we can tell from the figures, we would have been the most well off if we invested in the S&P 500, but the dividends it provides is relatively low.
Individuals – such as those in retirement or partial retirement – may require regular income to pay for their living expenses. Other individuals who are considering FIRE (Financial Independence, Retire Early) may also want to build their portfolio with income in mind. If we required regular income from our investment portfolio that does not pay a relatively good dividend, we would have to sell off parts of the investment in market conditions that could be good or poor.
Another way to think about income investing is that only strong and well-established companies that have healthy cash flows can afford to pay out dividends regularly and regardless of market booms and busts. However, due to the nature of such companies, they may not be in the growth stage of their trajectory. This is one reason why total returns for STI companies may lag behind companies on the S&P 500 Index.
Read Also: [2021 Edition] Complete Guide To Start Your REITs Investing Journey In Singapore
Even The STI ETFs Do Not Pay The Same Dividend Yield
While the STI pays a dividend yield of close to 5.0%, it doesn’t mean that we will get this if we invest in an STI ETF. This is because we have an option to invest in one of the two STI exchange-traded funds (ETFs) – the SPDR STI ETF or the Nikko AM STI ETF. Since these ETFs will have additional costs and tracking errors, the dividend we receive will be different and should be slightly lower.
For example, the SPDR STI ETF states that it’s distribution yield is 4.14% (as at 17 Jan 2024). While Nikko AM STI ETF does not state this information, it should be quite close as well.
Read Also: SPDR STI ETF VS Nikko AM STI ETF: What’s The Difference Between These 2 STI ETFs Listed On The SGX?
Stocks On The STI Pay Out Different Dividend Yields
The Straits Times Index (STI) is made up of 30 of the largest and most liquid stocks in Singapore. As mentioned earlier, such companies typically have strong cash flows to pay out regular dividends, but may not be high-growth companies. In addition, the STI also comprises six REITs – which are also known to pay out relatively good distributions regularly.
It should also be quite intuitive that all 30 constituents of the STI will pay a different distribution yield. We look at what the different stocks on STI are paying in dividend below:
| No. | STI Constituent Stocks | Market Capitalisation (billion) | Dividend Yield |
| 1 | DBS Group (SGX: D05) |
$84.7 | 5.50% |
| 2 | Oversea-Chinese Banking (OCBC) (SGX: O39) |
$57.5 | 6.28% |
| 3 | United Overseas Bank (UOB (SGX: U11) |
$47.3 | 5.70% |
| 4 | Jardine Matheson Holdings (JMH) (SGX: J36) |
US$11.6 | 5.43% |
| 5 | SingTel (SGX: Z74) |
$39.3 | 4.41% |
| 6 | CapitaLand Ascendas REIT (SGX: A17U) |
$12.9 | 5.04% |
| 7 | CapitaLandInvest (SGX: 9CI) |
$15.6 | 4.00% |
| 8 | Singapore Exchange (SGX) (SGX: S68) |
$10.4 | 3.42% |
| 9 | Keppel Corporation (SGX: BN4) |
$12.7 | 4.72% |
| 10 | Hongkong Land (SGX: H78) |
US$7.5 | 6.43% |
| 11 | Thai Beverage (SGX: Y92) |
$13.6 | 3.80% |
| 12 | Singapore Airlines (SIA) (SGX: C6L) |
$18.9 | 5.97% |
| 13 | ST Engineering (SGX: S63) |
$11.9 | 4.21% |
| 14 | Mapletree Logistics Trust (MLT) (SGX: M44U) |
$8.3 | 4.21% |
| 15 | Mapletree Industrial Trust (MIT) (SGX: ME8U) |
$7.1 | 4.73% |
| 16 | Venture Corp (SGX: V03) |
$3.9 | 5.59% |
| 17 | Wilmar International (SGX: F34) |
$22.5 | 4.83% |
| 18 | Genting Singapore (SGX: G13) |
$12.0 | 3.52% |
| 19 | Mapletree PanAsia Commercial Trust (MPCT) (SGX: N2IU) |
$8.0 | 5.31% |
| 20 | Frasers Logistics & Commercial Trust (FLCT) (SGX: BUOU) |
$4.3 | 6.06% |
| 21 | UOL Group (SGX: U14) |
$5.2 | 2.45% |
| 22 | CapitaLand Integrated Commercial Trust (CICT) (SGX: C38U) |
$13.3 | 4.46% |
| 23 | City Development (SGX: C09) |
$5.8 | 1.25% |
| 24 | Seatrium (SGX: S51) |
$7.7 | – |
| 25 | Emparador (SGX: EMI) |
PHP 327 | 1.40% |
| 26 | Yangzijiang Shipbuilding (SGX: BS6) |
$6.0 | 3.31% |
| 27 | SATS (SGX: S58) |
$4.0 | – |
| 28 | Jardine Cycle & Carriage (SGX: C07) |
$11.5 | 5.20% |
| 29 | Sembcorp Industries (SGX: U96) |
$9.4 | 1.71% |
| 30 | DFI Retail Group (SGX: D01) |
US$3.1 | 2.21% |
Dividend yield for CapitaLand Ascendas REIT is retrieved from its website.
*Dividend yield is based on SGX Stock Screener information, unless stated otherwise.
5 Best-Yield STI Stocks
As we can see below, two of the top five dividend-paying counters on the SGX returned double-digit losses in the past 1-year period – HongKong Land (-33.4%) and Venture Corp (-24.0%). This is also another reason why it is so important to have a diversified portfolio of dividend-paying stocks.
Since REITs tend to pay higher distributions, and there are six REITs within the STI, it is perhaps surprising that only one of the top five dividend-paying stocks is a REIT. It is also heartening to see a turnaround story unfolding for Singapore Airlines (SIA) – which has delivered both 9.2% share price appreciation and have a dividend yield of 5.97%.
| No. | STI Stock | Dividend Yield | Price Appreciation (1-year) |
| 1 | Hongkong Land | 6.43% | -33.4% |
| 2 | Oversea-Chinese Banking (OCBC) | 6.28% | 1.0% |
| 3 | Frasers Logistics & Commercial Trust (FLCT) | 6.06% | -7.4% |
| 4 | Singapore Airlines (SIA) | 5.97% | 9.2% |
| 5 | Venture Corp | 5.59% | -24.0% |
*Price change from SGX Stock Screener
Read Also: Complete Guide To Investing In The Straits Times Index (STI) ETFs In Singapore
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