3 stocks paying out dividends in May. Are they a buying opportunity?

What happened?

It is not just Singapore REITs that pay out attractive dividends. 

The good news is that Singapore’s stock exchange contains a plethora of choices when it comes to dividend-paying stocks.

Earlier, I shared how DBS offers an attractive dividend yield after it raised its dividends in 2023.

With the dividend yield on the Singapore market at above 4%, I have been looking at some other dividend-paying stocks that can help me generate a steady stream of passive income.

As such, I started my search with three stocks that will pay their dividends in May, and are currently still trading cum-dividend.

Let us dive deeper into these three stocks - Sembcorp Industries, ST Engineering and Starhub. 

3 Singapore stocks that are paying dividends in May

#1 – Sembcorp Industries Ltd

Sembcorp Industries has an energy portfolio of 21.3 GW comprising 13.8 GW of renewable energy along with a project portfolio spanning more than 14,000 hectares across Asia.

The company turned in a mixed performance for 2023 with net profit rising even as revenue tumbled.

Turnover for 2023 dipped by 10% year on year to S$7 billion but net profit excluding exceptional items climbed 38% year on year to S$1 billion.

The business generated a positive free cash flow of S$645 million, though this was nearly 38% lower than the prior year’s S$1 billion.

Sembcorp Industries  declared a final dividend of S$0.08, doubling the S$0.04 final ordinary dividend that was paid out last year.

Its shares will go ex-dividend on 29 April and the dividend will be paid on 9 May.

Sembcorp Industries  aims to grow its gross renewables capacity to 25 GW by 2028, as outlined during its Investor Day.

Management believes that its Renewables segment is expected to perform well in 2024 as more greenfield projects are commissioned while brownfield acquisitions are slowly completed as the year passes.

Find out how much dividends you would have received as a shareholder of Sembcorp Industries in the past 12 months with the calculator below.  

Click here to learn more about Sembcorp Industries dividend history and dividend yield.

#2 – Singapore Technologies Engineering Ltd

Singapore Technologies Engineering reported a sterling set of earnings for 2023.

Its revenue rose 11.8% year on year to S$10.1 billion, buoyed by year-on-year revenue improvements across all three of its divisions (excluding the divested US Marine division).

Operating profit excluding one-off expenses surged by 40% year on year to S$946 million while core net profit improved by 24% year on year to S$610 million.

The business also generated a positive free cash flow of S$562.6 million for 2023, reversing the free cash outflow of S$293 million a year ago.

Singapore Technologies Engineering  declared a quarterly dividend of S$0.04, bringing 2023’s total dividend to S$0.16.

This S$0.04 dividend will go ex-dividend on 30 April and be paid on 14 May.

The blue-chip engineering group secured a total of S$14.8 billion of new contracts last year, bringing its order book to S$27.4 billion as of 31 December 2023.

Of this, S$7.9 billion is expected to be delivered in 2024.

Find out how much dividends you would have received as a shareholder of ST Engineering in the past 12 months with the calculator below.  

Click here to learn more about ST Engineering dividend history and dividend yield.

#3 – StarHub Ltd

Starhub's share price surged recently after the company reported its full year results.

From a share price of about S$1 in June last year, the company's share price recently touched a one-year high of S$1.26. 

The company reported a stellar set of results as it undergoes its DARE+ transformation.

Operating profit leapt by 46.3% year on year to S$226.3 million as operating expenses contracted by 2% year on year.

Net profit soared 140% year on year to S$149.6 million in 2023 and the telco also generated a positive free cash flow of S$185.9 million.

Management has proposed a final dividend of S$0.042, taking the total 2023 dividend to S$0.067, which exceeded 2023’s dividend guidance of “at least S$0.05”.

Shares will go ex-dividend on 29 April and the dividend will be paid on 16 May.

The group is tapping on its transformation plan to accelerate its earnings growth and for 2024, StarHub is guiding for “at least S$0.06” in total dividends with a commitment to distributing at least 80% of its net profit (excluding exceptional items).

Find out how much dividends you would have received as a shareholder of Starhub in the past 12 months with the calculator below.  

Click here to learn more about Starhub's dividend history and dividend yield.

What would Beansprout do?

The three companies above are solid names with long dividend-paying track records.

Across the three stocks, Starhub has the highest forward dividend yield of 6.4%. This may explain its strong share price performance in the past months.

On the other hand, Sembcorp Industries has a lower dividend yield of 2.9%, while ST Engineering has a dividend yield of 4.0%.

As such, we will be considering adding Starhub to our income portfolio, especially as its transformation plan has helped to drive improved earnings. 

Learn more about Starhub's transformation plan here.

To find out which other stocks will be paying out a dividend in May, check out our dividend calendar.

If you are interested to learn about income opportunities in the Singapore market, join our upcoming webinar on 14 May 2024 to find out how you can identify these opportunities. 

You can learn more about these Singapore blue chip companies paying out a dividend in May here:

• Sembcorp Industries dividend history and dividend payment dates  

• ST Engineering dividend history and dividend payment dates 

• Starhub dividend history and dividend payment dates 

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