A note on dividend yield figures for investment decision support

A note on dividend yield figures for investment decision support (information from perplexity.ai)

My question 1: "With regard to the reported figures of dividend yields of Singapore stocks, e.g. Singtel and Venture Corporations, why do different sources provide different dividend yield figures? What could be the main types of dividend figure and which dividend figures tend to be lower than others?"

The reply: "Different sources report varying dividend yields for Singapore stocks like Singtel and Venture Corp due to differences in calculation methods, data timing, and reference dividends. Yield is fundamentally annual dividends per share divided by current share price, but discrepancies arise from what dividends are included and when the price is captured. Forward-looking estimates often show lower yields than historical ones.

Main Reasons for Variations

Sources like Yahoo Finance, SGX, or broker platforms pull from distinct databases, leading to lags in updates or use of different ex-dividend dates. Price volatility affects yields inversely—a falling Singtel share price (e.g., from S$2.80 to S$2.60) boosts yield even if dividends stay constant. Some sites adjust for corporate actions like share splits, while others do not, and currency fluctuations can impact foreign investors' views.

Key Dividend Figure Types

• Trailing Dividend Yield: Uses dividends paid over the past 12 months (historical), often higher as it captures recent payouts like Singtel's full-year dividends.
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• Forward Dividend Yield: Based on expected future dividends announced or forecasted, typically lower due to conservative analyst projections or anticipated cuts.
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• Annualized Interim Yield: Extrapolates recent interim dividends (e.g., quarterly), which can fluctuate and understate if special dividends were paid last year.
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Yield Comparisons

Trailing yields tend to exceed forward yields, especially for stable dividend payers like Singtel (trailing ~5-6% vs. forward ~4-5% in recent reports). Special or one-time dividends inflate trailing figures temporarily. Venture Corp's yields vary more due to cyclical earnings, with trailing often 2-3% higher than forward."

My question 2: "For stock investors, which dividend yield figure is the most appropriate figure to rely on to make investment decision?"

The reply: "For stock investors, the forward dividend yield is generally the most appropriate figure to rely on for investment decisions. It reflects expected future payouts based on company guidance and analyst forecasts, aligning better with long-term holding strategies than backward-looking metrics. Trailing yields, while useful for historical context, can mislead by including one-time specials or past highs not sustainable ahead.

Why Forward Yield Prevails

Forward yields prioritize sustainability, incorporating announced dividends and earnings projections, which helps assess if a stock like Singtel can maintain payouts amid telecom pressures. Investors avoid "yield traps" where high trailing yields signal declining businesses, as seen in cyclical firms like Venture Corp. Trailing yields suit short-term income seekers but overstate value if dividends face cuts.

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Key Considerations

• Payout Ratio: Pair forward yield with this (ideally 40-60%) to confirm coverage from earnings.
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• Dividend Growth: Favor stocks raising payouts annually over static high yields.
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• Total Return: Yields matter less than combined growth plus dividends for conservative portfolios like Singapore dividend strategies.
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Comparison of Yield Types

Type	Basis	Best For	Typical Level vs. Others
Trailing	Past 12 months	Income now	Higher
Forward	Next 12 months est.	Long-term decisions	Lower, more realistic
Annualized Interim	Recent quarterly x4	Quick checks	Variable, often mid-range