Screening For Dividend Stocks In January 2020

Happy Chinese New Year!

The last time I screen for dividend stocks was back in November 2019. Since its a brand new year and the first month of the year 2020, I am interested to find which stocks currently provide the highest dividend yield.

How do I find stocks to analyse and decide if it is worth investing? Every month, I will always start by running the stock screener that I have saved on Stocks Café. There are several websites that offer such a tool to screen for stocks using conditions that you can set such as dividend yield, P/E ratio, P/B ratio and Market Capitalization etc. Some website that offers such a tool are Singapore Exchange, FSMOne and StocksCafe.

The stock screener offered by Stocks Café allows me to save the conditions that I can pre-set. You can check out my review here on the Stocks Café Dividend Stocks Screener (Read more: Screening For Dividend Stocks Using Stocks Cafe Stock Screener).

Below are the top 10 dividend yielding stocks as of 25th January 2020.

Name Current Yield % P/E P/B Market Cap
OUE 9.459 7.11 0.329 1.3B
Ascendas-iTrust 9.315 8.15 1.635 1.9B
SPH REIT 9.009 17.52 1.166 3B
SPH 8.852 16.77 0.984 3.4B
Frasers Logistics and Industrial Trust 8.574 11.86 1.271 2.8B
DBS 8.015 10.81 1.385 66.8B
Far East Hospitality Trust 8.014 17.5 0.849 1.4B
Mapletree NAC Trust 7.622 6.45 0.887 4B
Hong Leong Finance 7.547 9.91 0.626 1.2B
Guocoland 7.254 8.53 0.559 2.2B

The above results look pretty interesting as there are some stocks that are unfamiliar to me such as Ascendas-iTrust.

Ascendas India Trust is a property trust which owns seven IT parks and one logistics park in India with total floor area of 13.1 million sq ft spread across Bangalore, Chennai, Hyderabad, Pune and Mumbai. Ascendas India Trust is focused on capitalising on the fast growing IT and logistics industries in India.

Mapletree NAC Trust also appear in the above list as the top 10 dividend yielding stocks but we should be careful here as Mapletree NAC Trust has yet to walk out of the impact of the Hong Kong riots. (Read more: Mapletree North Asia Commercial Trust DPU Fell 13.3% )

Last, I just want to mention again that the above list is for reference only and we should do our homework before buying into the stock simply for the dividend yield.

Mapletree North Asia Commercial Trust DPU Fell 13.3%

Mapletree North Asia Commercial Trust has announced their 3QFY19/20 financial results on 17th January 2020. As expected, gross revenue fell 36.3% to S$67.3m as compared to S$105.6m in 3QFY18/19. Net Property Income also fell 40% to S$50.8m. Distribution fell 13.3% to 1.671 cents. The DPU already included the distribution top up due to Festival Walk closure. Without the top up, the DPU can be worst.

Due to the damages from the riots, Festival Walk has been closed since 13 November 2019. With the mall closure, rental was not collected from the retail tenants. The mall has re-opened and collection of rental resume on 16th January 2020.

3QFY19/20 Financial Results

3QFY19/20
(S$’000)
3QFY18/19
(S$’000)
Change
Gross Revenue 67,277 105,626 (36.3)%
Net Property Income 50,776 84,592 (40.0)%
Distributable Income 53,379 61,006 (12.5)%
Distribution Per Unit (“DPU”) (cents) 1.671 1.927 (13.3)%

Occupancy Rates

As of 31st December 2019, overall portfolio occupancy stood at 96.3%. What surprises me was that occupancy for Festival Walk stood at 100% even though the mall was damaged by the riots.

Debt

Aggregate leverage stood at 37.1%.

Distribution Per Unit

It is extremely hard to forecast the distribution yield due to the distruption of DPU in 3QFY19/20. Based on the closing price of S$1.24 on 21st January 2020 and an estimated FY19/20 annualized DPU of 7.229 cents (1.95+1.937+1.671+1.671), this translate to a dividend yield of 5.83%.

Summary

At the current price of S$1.24, my opinion is that it is too risky to enter given my estimated dividend yield of 5.83%. Nobody knows but things can get worst or better. If you have not noticed, given the weak occupancy at Gateway Plaza, Sandhill Plaza and its recently acquired Japan properties, I do not think its advisable to jump onto the wagon right now just because news of Hong Kong riots have pushed the share price down.

I currently do not own any shares of Mapletree North Asia Commercial Trust. However, my preferred entry price will be S$1.16 and below for an estimated dividend yield of at least 6.20%.

The Best Fixed Deposits of January 2020

Last month in December, I have placed a 6 months fixed deposit with CIMB Bank that gives me an interest rate of 1.80% p.a. The good news is that CIMB Bank has maintained its interest rate of 1.80% p.a. for its Chinese New Year Fixed Deposit Promotion. They are probably the only bank that maintain the high interest rate of 1.80% p.a.

While searching for Chinese New Year fixed deposit promotions, I found a promotion from OCBC that gives you vouchers instead of cash for a 6 month locked in period. The interest rate is 1.70% p.a. if you compare the value of the vouchers against cash. You can read more about it below.

The next good deal is from Hong Leong Finance where they maintain their interest rate of 1.73% p.a.

CIMB Fast Fixed Deposit Chinese New Year Promotion

Interest rate: 1.80%, Minimum Placement: S$10,000, Promotion Valid Until: 31st January 2020

The total interest that you will receive if you place S$20,000 for 12 months is S$360.

OCBC Bank Chinese New Year Deposit Promotion

Interest Rate: Not Applicable, Minimum Placement: S$10,000, Promotion Valid Until: 31st January 2020

As part of OCBC Chinese New Year promotion, receive S$85 NTUC FairPrice vouchers with every S$10,000 in fresh funds deposited into OCBC Passbook, Statement Savings, Premier Statement Savings and Premier Easisave accounts. The funds must be maintained for 6 months.

If you work backwards, the S$85 NTUC FairPrice vouchers is equivalent to an interest rate of 1.70% p.a based on a deposit of S$10,000 locked in for 6 months.

Hong Leong Finance

Interest Rate: 1.73%, Minimum Placement: S$20,000, Promotion Valid Until: Not stated

The total interest that you will receive if you place S$20,000 for 12 months is S$348.76.

Standard Chartered Bank (Singapore)

Interest Rate: 1.55%, Minimum Placement: S$25,000, Promotion Valid Until: 31st January 2020

Unless you are a priority banking customer, otherwise you get an interest rate of 1.55% p.a. for a minimum place of S$25,000 with Standard Chartered Bank.

The interest that you will get is S$322.92 based on an interest rate of 1.55% p.a. for a placement of S$25,000 for 10 months.

If you are a priority customer, the interest that you will get is S$343.75 based on an interest rate of 1.65% p.a. for a placement of S$25,000 for 10 months.

MayBank Singapore Dollar Time Deposit

Interest Rate: 1.60%, Minimum Placement: S$20,000, Promotion Valid Until: Not stated

Maybank has further reduced their fixed deposit interest rate from 1.80% to 1.60%. The total interest that you will receive if you place S$20,000 for 12 months is S$320.00. However, there are some catch should you choose to place your fixed deposit with MayBank

  • You need to have a MayBank Current or Savings account.
  • For every S$1,000 deposited into the CASA Account, S$10,000 can be placed into the Singapore Dollar Time Deposit, subject to a minimum of S$20,000 in Time Deposit and the corresponding minimum deposit of S$2,000 in the CASA Account.