Get Smart: Dividends to Fill Your Red Packets

On behalf of all of us at The Smart Investor, we’d like to wish you and your loved ones a Happy New Year! 

The New Year ushers in yet another major festival for many Singaporeans – the Lunar New Year.

For many of us, it also means it’s time to give out red packets containing cash to our parents and our children. 

Filling your red packets with dividends

This is where dividends can be helpful.

If you own companies that dish out dividends, this stream of passive income can help to fill up your red packets instead of dipping into your cash kitty.

If your dividend stream is large enough, you could even have some spare cash left over to spend on the festivities.

For instance, my family usually books a Chinese restaurant for our reunion dinner on the eve of the Lunar New Year.

The dividends received will go a long way to paying for this annual dinner, which is seeing a steady rise in cost because of high core inflation.

You may be asking – which companies can pay out steady, dependable dividends while giving me a good night’s sleep?

We are glad you asked.

Dividend stalwarts

Singapore’s stock market can be said to be a dividend investor’s paradise.

The bourse contains a wide variety of stocks that pay out dependable dividends. On top of that, dividend income is not taxable in Singapore.

One asset class you can explore is REITs or real estate investment trusts.

REITs are bundled real estate portfolios that collect a steady stream of rental income and pay this out as a distribution.

Some examples of REITs that paid out a distribution in December are Mapletree Industrial Trust (SGX: ME8U), Frasers Logistics & Commercial Trust (SGX: BUOU), and First REIT (SGX: AW9U).

The distributions paid out by these REITs will go a long way in helping to fill those red packets when the Lunar New Year arrives in February 2024.

At The Smart Investor, we also see potential in the REIT sector as it has been adversely affected in 2023 due to a combination of surging inflation and high interest rates.

As a result, many REITs have fallen to 52-week lows as poor sentiment dogs the asset class.

If REITs is not your cup of tea, there are also other companies 

Engineering firm Boustead Singapore Limited (SGX: F9D) and luxury watch retailer The Hour Glass (SGX: AGS) are two examples of dividend stalwarts that dish out dividends in December, too.

Blue-chip telco Singtel (SGX: Z74) also pays out its interim dividend in the same month, as does the owner and operator of Singapore’s next-generation nationwide broadband network, NetLink NBN Trust (SGX: CJLU).

Get Smart: Compounding your wealth

As you build up your dividends portfolio, this useful stream of passive income can also be a great help in tackling inflation and rising costs.

And with a large enough flow of dividends, it can also eventually allow you to retire happily on a cushion of passive income.

Ready to dive into profitable REITs investing in 2024? With REITs at a low and interest rates high, don’t miss out on this golden opportunity to position yourself for success. Limited spots available. Act fast to secure your place in this exclusive FREE webinar. Click HERE now!

Not sure where to park your money in 2023? Give dividend stocks a try. You don’t need a lot of capital to start a stream of passive income. Our latest guide will show you how to invest and where to find the juicy dividends in SGX. Click here to download the report for FREE. 

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Disclosure: Royston Yang owns shares of Mapletree Industrial Trust, Frasers Logistics & Commercial Trust, Boustead Singapore Limited and NetLink NBN Trust.

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