Micro-Mechanics (Holdings)

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July 18, 2018 Best CEO 
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Singapore’s Best 5 Dividend Stocks With REIT-Like Yields
Sudhan P@July 17, 2018
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Many Singapore income investors like to invest in real estate investment trusts and business trusts 
as such instruments give them a regular stream of income. 
However, those trusts are usually highly leveraged. 
If the economy suddenly goes south, highly-leveraged companies could get hurt.

Some stocks in the local stock market offer high dividend yields just like the trusts, 
but without taking on too much debt. Therefore, they tend to be safer income stocks.
Let’s check out five of the best dividend stocks in Singapore right now. 
These stocks were screened using stringent criteria to include only stocks that have:
1) Dividend yield of between 3% and 10%;
2) Dividend payout ratio of below 80%;
3) Debt-to-cash flow of below 50%;
4) Dividend growth rate of more than 3% per annum for the past three years; and
5) Profit growth rate of more than 3% for the last three years.

The first criterion was chosen because I wanted stocks with a reasonable yield at the minimum. 
The second criterion gives me companies with well-covered dividends, 
while the the third criterion is used to select stocks with strong balance sheets. 
The dividend and profit growth rates of 3% – the fourth and fifth criteria 
– were included as the average long-term inflation rate in Singapore is around 2.6%. 
Dividend and profit growth rates above the average inflation rate are superb, 
as that means that the dividends and profits are keeping up with inflation at the very least.

Coming in third is Micro-Mechanics (Holdings) Ltd (SGX: 5DD). 
The company designs, manufactures, and markets consumables and precision tools 
that are used in the semiconductor industry. 
At its current share price of S$1.78, Micro-Mechanics has a dividend yield of 4.5%, 
excluding special dividends. With the addition of the special dividend, Micro-Mechanics’ 
dividend yield goes up to 5.1%.