Saturday 1 June 2024

Creating a High Dividend Yield Portfolio of Overseas Companies - Increase APTT Stake, Partial Sale of Yanlord

While many are focusing on the historical 10-year high dividend yield of local REITs; looking beyond Singapore, overseas companies are giving even higher yields. While a few are indeed distressed stocks, majority are of strong fundamentals status.

Hong Kong Exchange - 7 to 10% Dividend Yielders

As said previously, blue chip status Hong Kong Index companies are yielding 7-10% in dividends. A few of these companies have market caps larger than Singapore companies. Examples are China Construction Bank, LINK REIT, Sinopec, Hang Lung properties, ICBC. These aint micro caps.

Payout wise, they are giving sustainable dividend payouts (less than 100% of earnings). For those with Moo moo, Webull, Tiger broker etc, one can consider using the currency conversion within the app to change Singapore Dollar to Hong Kong Dollar to buy these companies that are fundamentally sound.

Overseas Companies Listed on SGX

There are overseas companies listed on SGX that provides a high dividend yield such as Asia Pay TV Trust, Capitaland China Trust and Riverstone. I have covered APTT previously and do think its 1.05 cent annual dividend (13% dividend yield) is sustainable but unlikely to grow higher. It is in a declining business and needs to delever, thus explaining why the dividend is only approximately 25% of its cash generation ability; conservative but there is a need with its own cashflow reducing. I have sold a few of my Yanlord shares to accumulate a larger position in APTT.

Investing Overseas

With overseas yields being high because of (i) a higher risk free rate overseas as compared to Singapore, (ii) the ease of moving cash and (iii) we have cheap and useful brokers such as Moo Moo, Webull and Tiger, it is extremely easy to change currency from Singapore dollar to other currencies.

As such I will be moving in the direction of accumulating high yielding foreign companies. While Alibaba sports a 3% dividend yield, I will not add to it given the large composition it has in my portfolio. Neither will APTT. 

My likely additions are the 7-10% dividend yielder on the Hang Seng Index. This will be done by changing Singapore Dollar to Hong Kong Dollar to take advantage of Singapore's strong currency.

Below is my current portfolio holding. More additions are coming up.

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