Dividends

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Dividends
  • Asked by Christopher Tan

    Lin ML
    Lin ML
    Level 2. Rookie
    Answered 2d ago
    It is astute of you to notice the 30% withholding tax before you invest in dividend stocks in the US! If you'll allow me to share my personal example: In splitting my investment portfolio between the US and Singapore markets, i paid attention to the strengths and drawbacks of the stocks of each market. Like you pointed out, the 30% withholding tax of US stocks' dividends was a big issue for me. Who woud want their dividend payouts to be reduced unnecessarily? But, I also realised that US stocks (even the big caps) are generally more dynamic (or volatile). This means that investments in US stocks could be used to derive strong capital gains. Conversely, SG stocks are less dynamic. But, we have a suite of attractive REITS what are regulated to pay out a significant portion of their income as dividends. Several blue-chip stocks in Singapore also pay out generous dividends. For example, the banks at this time pay out in excess of 3%, while ST Engineering typically has a dividend yield in excess of 4%. Naturally, the SG stocks could be targeted for a dividend strategy. With that in mind, I focus on growth and value companies among my stock picks from the US markets. On the other hand, I identify stable companies with a good track record of sustainable and generous dividend yields to generate income. Some investors call this a dumbbell strategy - growth/value investing on one end and income investing on another. This has so far worked well for me =)
  • Asked by Anonymous

    Alex Chua Cheng En
    Alex Chua Cheng En, Pcme at Anderson Junior College
    Level 3. Wonderkid
    Answered 1w ago
    Assuming the dividend per share is stable, x% is the current/desired dividend yield (annually) Monthly =1k. Annually =12k How much u need to invest =12k/x 100 E.g your dividend yield = 6%, u need to invest 200k
  • Asked by Anonymous

    Vineeta Sonone
    Vineeta Sonone, Financial Assistant at Multi Management & Future Solutions
    Level 3. Wonderkid
    Answered 1w ago
    Yes, it is a well know strategy. You can know more here why it is the most sought after investing strategy - https://www.mmfsolutions.sg/blog/dividend-investing-sgx-stocks-make-money/
  • Asked by Anonymous

    Gabriel Tham
    Gabriel Tham, Kenichi Tag Team Member at Tag Team
    Top Contributor

    Top Contributor (Mar)

    Level 7. Grand Master
    Answered 1w ago
    If you intend to purchase monthly then Roboadvisor would seem to be the better option because it will lower your overall fees and expenses. Else, you can consider to collect 300/month and then buy stocks with the saved up amount. 300/month to buy individual stocks each month will end up with you giving away too much in fees.
  • Asked by Anonymous

    Isaac Chan
    Isaac Chan, Business at NUS
    Top Contributor

    Top Contributor (Mar)

    Level 6. Master
    Answered 2w ago
    On top of what the others have mentioned, I can introduce 2 metrics that might be helpful, which is Dividend Payout Ratio and dividends as a percentage of free cashflow. Dividend Payout Ratio Dividend payout ratio is simply the percentage of net profits that are being paid out to shareholders. To find this simply take dividends paid out divided by net profit as shown. The lower the figure, the better, since this means that the company isn't taking out too much of its net profits for dividend payments, and the dividends can sustain. Dividends as Percentage of Free Cashflow FCF measures cashflow that is availible to lenders and shareholders after the cash needs of the business have all been settled. This is a powerful measure since it looks at what kind of cash remains for non-business operating activities. The formula shows how to get FCF. To get the percentage yield, just take the dividends divided by the FCF. Again, the lower the percentage the better.
  • Asked by Anonymous

    Luke Ho
    Luke Ho, Money Maverick at Money Maverick
    Level 6. Master
    Answered 2w ago
    Be mindful that ETF is an instrument, it's not a class of investments. If we take it generally, we usually refer to market equity ETFs such as the Singapore one and the US one (STI ETF and SNP500). I'd suggest that you can consider global bond funds, and more aggressive emerging market funds. ETFs are ridiculously easy to outperform, anyway. https://www.moneymaverickofficial.com/posts/every-single-passive-fund-manager-underperform-reason
  • Asked by Anonymous

    Chris Lee Susanto
    Chris Lee Susanto, Founder at The Value Investing Mentorship Club™
    Level 2. Rookie
    Answered 2w ago
    There are many types of investments that pays out so called "dividends". The common one are REITS and slow growing companies which has not much use of its cash so instead of reinvesting in its business, it is better to pay it out as dividends to shareholders. Key here is to look out for SUSTAINABILITY of dividends when screening for dividend paying investments. One metric you can look out for is comparing its FCF to its dividends paid.
  • Asked by Anonymous

    Jonathan Chia Guangrong
    Jonathan Chia Guangrong, Fund Manager at JCG Fund
    Level 6. Master
    Answered 2w ago
    How was this setup done in the first place? If its through your broker give them a call to get it sorted out
  • Asked by Anonymous

    Leonard Tan
    Leonard Tan
    Top Contributor

    Top Contributor (Mar)

    Level 5. Genius
    Answered 2w ago
    I distinctly remember somewhere that Apple is having trouble reinvesting this sum of money into organic growth. Apple does stock buybacks occasionally(though I am not exactly sure why they are not spending more). Some people say Apple is amassing a huge sum of money possibly for a huge M&A(inorganic growth). At this point Apple is such a big conglomerate and doesn't exactly need to acquire anything to improve its core business operations.
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