The Most Overlooked Dividend Stock on the SGX Right Now

Core Viewpoint - Singapore's dividend-focused market often leads investors to well-known blue-chip stocks and REITs, causing them to overlook lesser-known companies that may offer better value due to higher income potential and lower valuations [1] Group 1: Characteristics of Overlooked Stocks - An overlooked stock typically has limited analytical coverage and little mainstream financial attention, despite stable fundamentals and stagnant share prices [2] - The lack of attention may stem from the company operating in a misunderstood sector or utilizing an under-appreciated business model [2] - Quality fundamentals, such as a solid balance sheet, healthy cash flows, and consistent dividend payouts, are essential to distinguish valuable overlooked stocks from others [3] Group 2: Thai Beverage Public Company Limited (ThaiBev) - ThaiBev, known for brands like Chang Beer and Oishi Green Tea, reported a total revenue decline of 2.1% year-on-year for FY2025, amounting to THB333.3 billion [4] - The net profit attributable to shareholders was THB25.4 billion, with free cash flow increasing from THB29.2 billion to THB33 billion [5] - The company's net debt to EBITDA ratio is 3.33x, and the net debt to equity ratio is 1.09x, indicating elevated leverage but reasonable capitalization [5] Group 3: Dividend and Yield - ThaiBev declared a dividend of 0.62 baht (approximately S$0.025) per share, resulting in a dividend payout ratio of 61% [6] - The stock's dividend yield is around 5.6%, which is above the average of the Straits Times Index [7] - ThaiBev is not a popular stock due to its nature as a diversified consumer-staples company, lacking the excitement of tech or growth stocks [7] Group 4: Investment Approach - ThaiBev is best suited as a core dividend stock, held alongside other stable dividend-paying stocks, focusing on long-term income generation rather than short-term price movements [11] - The business's stability allows for infrequent reviews, typically once or twice a year [11] - Overlooked stocks like ThaiBev can provide better income value compared to popular stocks that are often priced for perfection [12]