Put it this way, high dividend yield must be accompanied by high quality businesses with a durable competitive advantage.
When I look at dividend stocks as a Singapore investor, I often compare businesses that pay dividends that are well secured by a consistent free cash flow.
For example, what’s different is dividend growers like Sheng Siong produce free cash flow and pay dividends within its reasonable range.
Despite market cycles, this supermarket giant continues to grow its dividends and earnings year after year. In fact, it’s now earning close to S$150 million in a single year.
However, given the intense competition, it’s hard to say whether a high dividend yield is still secured by free cash flow. It’s even harder to beat inflation if a company’s dividends are affected by intense competition like the war that prolong for months that affect the stock earning effect
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
- JanetFast·03-19 17:06Yeah, Sheng Siong's cash flow is strong, but competition and inflation are real worries. [吃瓜]LikeReport