How to Find the Best Dividend Paying Stock in SGX Like a Pro

This is more of the notes I have gleaned from the book rather than a book review.

Book Title: Secrets Of Dividend Investors: The DIY Approach To Finding The Best Dividend Stocks
Author: Mark Lin.
Publisher: Rank Books. 2011.

There are many good investment books out there, but they are mostly based on US stocks.

I chose this book because it is written by a Singaporean about Singapore stocks.

The topic is about buying stocks for dividends which I have been doing for years.

Dividend investing does not take up much of my time monitoring ups and downs daily.

I want to become a more profitable dividend investor quickly, so read more I must.

Here are my 14 takeaways from the book Secrets of Dividend Investors by Mark Lin.

1. Choose cash dividend over scrip dividend. We want cash flow.
2. Do not buy dividend paying stock on XD.  XD is the day it pays dividends and CD is after.
3. A good dividend payout ratio is 50%++. DPR = dividends / net profit.
4. Dividend yield should be at least 3%. Dividend yield = dividend per share /price per share.
5. Choose companies in stable, non-cyclical industries, least affected by economic downturns.
6. Choose companies with high dividend payout ratio, that are cash rich and mature.
7. Choose companies with past track record of dividend payment. Check SGX website.
8. Choose low risk, high returns, undervalued and high dividend paying stocks. Exist?
9. Choose near monopoly companies. Eg SingPost and SPH.
10. Choose REIT companies mandated to pay 90% income. Eg. Frasers Centrepoint Trust and K-REIT Asia.
11. Other REIT companies? Eg. Capitamall,  Starhill Global, Capitacommercial, Suntec REIT and CDL.
12. Beware! REITs are in the cyclical industry highly subjected to economical downturn.
13. Bonds vs Equity? Choose equity to buy part of the company. Bonds means lend money to the company. Choose Equity.
14. Resources:
    • http://thefinance.sg/
    • http://www.nracapital.com/research/blogs/
    • http://remisiers.org/research.html
    • http://www.ocbcresearch.com/
    • http://www.maybank-ke.com.sg/research.htm
    • http://research.sgx.com/
    • http://www.sharesinv.com/
    • http://investmentmoats.com/DividendScreener/DividendScreener.php/
    • http://sreit.reitdata.com/
    • http://yieldstocks.reitdata.com/

OK. Off I go to research and buy myself some more dividend paying stocks.

Although the book covers more formulae and calculations, I will just use point #7 above.

Wait… One more thing…

The book did not cover my one big question: Can you make a living investing in dividends? Let me know your experience in the comment box below.

Adrian Lee
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