Looking for dividend stocks to buy in December 2020 but not sure where to start? While others shop for stuff on the 12.12 sale, I shop for dividend stocks.
With recent news of COVID-19 vaccine availability, the US stock market rallied to such positive news even though daily death rates are still very high in many countries. Since the Singapore stock market always follow the trend of the US stock market, STI turned green as well.
Now, have you gotten a list of dividend stocks to buy?
As a dividend stock investor, I always keep a watch list of dividend yielding stocks on hand. When stock prices goes up, the current dividend yield decreases. When stock prices fall, the current dividend yield increases. This poses an opportunity for dividend stock investors to pick up the stock at higher yield and cheaper price.
One of the easiest way to create a watch list of dividend yielding stocks is to use a stock screener. My favourite stock screener is from Stocks Café. There are plenty of stock screening tools out there. You can use the one you are comfortable with.
I am a medium risk type of investor and thus I never looked at stocks with dividend yield more than 10%. Below are the conditions I set in the stock screener to identify dividend stocks.
- Current Yield (%) >= 5 and <= 10
- Price / Earnings <=20
- Price / Book <= 3
- Market Capitalization >= 1B
Below are the top dividend yielding stocks as of 11th December 2020 for your reference.
| Name | Current Yield % | P/E | P/B | Market Cap |
| CromwellReit EUR | 7.937 | 10.02 | 0.925 | 1.2B |
| NTES ADR US$+ | 7.896 | 3.11 | 0.5 | 6.3B |
| CromwellReit SGD | 7.667 | 10.73 | 0.964 | 1.9B |
| CapitaRetail China Trust | 7.106 | 8.43 | 0.801 | 1.7B |
| Yanlord Land | 6.126 | 3.27 | 0.387 | 2.1B |
| Hong Leong Finance | 5.696 | 10.18 | 0.552 | 1.1B |
| Ascendas Reit | 5.637 | 18.27 | 1.312 | 10.8B |
| OUE Commmercial Reit | 5.455 | 15.59 | 0.631 | 2.1B |
| Jardine Cycle & Carriage | 5.454 | 6.57 | 0.844 | 7.9B |
| Olam International | 5.298 | 8.99 | 0.847 | 4.8B |
| Frasers L&C Trust | 5.159 | 13.04 | 1.213 | 4.6B |
| Suntec Reit | 5.059 | 10.64 | 0.713 | 4.2B |
| UOB | 5.007 | 9.87 | 0.949 | 38.1B |
The list of stocks that meet my predefined criteria is getting shorter and shorter. This means that stock prices are getting more unattractive because when stock prices increase, current dividend yield decreases.
In October, the 3 local banks UOB, DBS and OCBC Bank appeared in the list with attractive current dividend yields of 5.816, 5.33 and 5.023% respectively. DBS and OCBC Bank are no longer in the screened results, which means their stock prices have rallied, thus the dividend yield is now lower based on current price. OCBC Bank makes up 2.44% of my stock portfolio.
UOB is the only bank stock that appeared in the screened results with a current dividend yield of 5.007% as compared to last month 5.315%. UOB is trading at S$22.77 as of 11th December 2020.
The current dividend yield of CapitaLand Retail China Trust is 7.106%. This looks suspicious as the CapitaLand Retail China Trust price has went up to S$1.32 and last month dividend yield was only 5.22%. Google showed the dividend yield at 4.90%. Thus, as due diligence, we should always cross check against the data provided by stock screeners. Based on the full year DPU of 9.9 cents and current share price of S$1.32, the current dividend yield is 7.5%.
Dividend investors who wants to invest in a REIT with retail assets in China can consider this. CapitaLand Retail China Trust’s recent preferential offering to unitholders has been priced at S$1.17, the bottom end of the indicative range. CapitaLand Retail China Trust said it was looking to buy interests in five business park properties in Suzhou, Xian and Hangzhou as well as the remaining 49 per cent stake in the Rock Square mall.
That’s all folks!