3 Singapore Stocks That Could Pay Out a Special Dividend in 2024

Receiving a dividend is always a happy occasion.

Such payments are a great source of passive income that can supplement your active income.

Fortunately for income investors, there are numerous stocks listed on the Singapore exchange that pay out a consistent dividend.

Occasionally, certain businesses may pay out a special dividend if the business is performing well or because they possess excess capital.

Such bumper dividends will go a long way in enriching an income investor’s pockets.

Here are three Singapore stocks that could potentially pay out a special dividend next year.

DBS Group (SGX: D05)

DBS needs no introduction, being Singapore’s largest bank by market capitalisation.

The bank has been a beneficiary of surging interest rates that pushed up its net interest margins (NIMs) and net interest income (NII).

For the third quarter of 2023 (3Q 2023), DBS reported a stellar set of earnings.

Total income rose 16% year on year to S$5.2 billion for the quarter.

In particular, NII jumped 23% year on year to S$3.7 billion for 3Q 2023 as the group’s NIM climbed from 1.9% in 3Q 2022 to 2.19%.

Net profit rose 16% year on year to S$2.6 billion.

For the first nine months of 2023 (9M 2023), the lender’s net profit surged 33% year on year to S$7.8 billion.

CEO Piyush Gupta provided a sanguine outlook for 2024 and expects NIM to stay around current levels with net profit maintained around 2023’s record level.

A brokerage house, Citi, believes that DBS may pay out a special dividend as the bank has excess capital.

DBS is also so flush with deposits that it lent the Monetary Authority of Singapore S$30 billion back in June.

Assuming the bank reports a solid fourth quarter 2023 result, management may decide to distribute any excess capital to shareholders in the form of a special dividend, akin to the S$0.50 special dividend that was paid out for 2022.

iFAST Corporation Limited (SGX: AIY)

iFAST is a financial technology (fintech) company that operates a platform for the buying and selling of unit trusts, equities, and bonds.

The group reported a sparkling set of financial numbers for 3Q 2023 as net profit more than quadrupled year on year to S$8.5 million.

The strong result was because of an initial one-month contribution from iFAST’s ePension division as it kick-started revenue recognition from the Hong Kong eMPF contract.

Despite the volatility in the stock markets, iFAST also saw net inflows of S$751 million for 3Q 2023 which helped to push its assets under administration to a new high of S$19.12 billion as of 30 September 2023.

Management expects the ePension division to contribute more significantly moving forward, and for profitability in 2023 to be “substantially better” than last year.

The fintech company has paid out an annual dividend of S$0.048 for both 2021 and 2022.

With its financial results for 2023 expected to be much better than the previous year’s, investors can expect a possible special dividend to be declared when the group reports its full-year results in February 2024.

Sembcorp Industries Ltd (SGX: U96)

Sembcorp Industries Ltd, or SCI, is an energy and urban solutions provider.

The blue-chip group has a balanced energy portfolio of 19.4 GW and an urban development portfolio spanning more than 13,000 hectares across Asia.

SCI reported a respectable set of earnings for the first half of 2023 (1H 2023).

Although revenue dipped by 6% year on year to S$3.7 billion, its underlying core net profit rose 8% year on year to S$530 million.

The utility giant also generated a positive free cash flow of S$376 million for 1H 2023.

The steady performance puts SCI on track to pay out another special dividend for 2023, similar to the S$0.04 in special dividends that was paid out in 2022.

Investors can also look forward to future growth as SCI looks intent on growing its renewables portfolio.

Its recent Investor Day 2023 outlined its five-year plan to grow this portfolio and invest up to S$14 billion to focus on both renewables and decarbonisation solutions.

Management has continued to make choice acquisitions to work towards this objective.

In November, the group acquired a 245 MW renewables portfolio in Vietnam for approximately S$218 million and 428 MW of wind assets in both China and India.

These acquisitions are part of the plan to grow its renewable capacity to 25 GW by 2028.

Attention: Investors aiming for both growth and peace of mind. We’ve pinpointed 5 SGX stocks known for consistent dividends. If you want to build a retirement portfolio, but don’t want the stress of stock watching, this report is for you. Click HERE to download now.

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Disclosure: Royston Yang owns shares of DBS Group and iFAST Corporation Limited.

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