What should you look out for when investing in equities?

For a first time investor, it is useful to consider your investment objective before deciding on what information is needed to analyse the companies.

Investing for income
If you are looking to generate income through investing, you may choose to focus on the dividends which are paid out by the company. This is typically measured by the dividends paid per share, or dividend yield. As a benchmark, the STI constituents had an average dividend yield of 3.4% as of the end of April 2017.

Current examples of dividend shares in Singapore are telecommunication shares and Real Estate Investment Trusts. As detailed in the table below the three shares of the STI with the highest dividends as of 15 May 2017 were Hutchison Port Holdings, Starhub and Ascendas REIT.

STI constituent

SGX Code

Market Cap S$m

GICS Sector Name

Total Return YTD (%)

Dividend Yield (%)

Hutchison Port Holdings Trust

NS8U

4,905

Industrials

-5.8

10.7

StarHub

CC3

4,737

Telecommunication Services

0.7

6.9

Ascendas REIT

A17U

7,469

Real Estate

17.8

6.4

CapitaLand Commercial Trust

C61U

4,826

Real Estate

13.2

5.8

CapitaLand Mall Trust

C38U

6,913

Real Estate

6.4

5.6

Singapore Telecommunications

Z74

60,580

Telecommunication Services

1.6

4.7

Singapore Airlines

C6L

12,760

Industrials

11.7

4.1

Singapore Press Holdings

T39

5,405

Consumer Discretionary

-2.5

4.1

Singapore Technologies Engineering

S63

11,688

Industrials

19.2

4

Singapore Exchange

S68

7,865

Financials

4

3.8

Top 10 dividend yielding shares for the past 12 months
SGX, Bloomberg & SGX StockFacts (data as of 12 May 2017)

Investing for capital appreciation
Alternatively, you may look at companies which have exhibited higher than average growth over the years, and focus on how the company has grown in terms of their total return. Higher total return typically results from higher capital appreciation and higher dividend yield.

In the Singapore context, as detailed in the table below, the three shares of the STI with the highest total return in 5 years as of 12 May 2017 were Yangzijiang Shipbuilding Holdings, Global Logistic Properties and City Developments.

Name

SGX Code

Market Cap S$m

Total Return YTD (%)

Dvd Ind Yld (%))

GICS Sector Name

Yangzijiang Shipbuilding Holdings

BS6

4,733

51.5

3.2

Industrials

Global Logistic Properties

MC0

13,499

30.9

2.1

Real Estate

City Developments

C09

9,620

29.2

0.8

Real Estate

CapitaLand

C31

15,332

22.8

2.8

Real Estate

DBS Group Holdings

D05

52,582

21

2.9

Financials

Genting Singapore

G13

12,987

21

2.8

Consumer Discretionary

UOL Group

U14

5,691

20.5

2.1

Real Estate

Singapore Technologies Engineering

S63

11,688

19.2

4

Industrials

Hongkong Land Holdings

H78

25,206

18.9

2.5

Real Estate

Oversea-Chinese Banking Corp

O39

44,125

18.3

3.4

Financials

Top 10 total return YTD shares
Source: SGX, Bloomberg & SGX StockFacts (data as of 12 May 2017)