4 Dividend-Paying Singapore Food and Beverage Stocks That Could Deliver Delicious Returns - The Smart Investor

It is no secret that Singaporeans love their food.

From food bloggers to websites recommending the newest cafes and restaurants, it seems like we are fixated on satisfying our taste buds with delicious grub.

For investors, food and beverage (F&B) stocks can also deliver tasty returns as they cater to people’s hunger.

Income-seeking investors should also rejoice as many of these stocks also pay out a dividend to boot.

We throw the spotlight on four such F&B stocks that you could wish to add to your buy watchlist.

Fraser and Neave Ltd (SGX: F99)

Fraser and Neave, or F&N, is a Southeast Asian consumer group with F&B categories in Beer, Dairies, and carbonated soft drinks.

The group owns some of the most recognisable drinks brands such as Magnolia, 100Plus, and Nutrisoy.

F&N released its fiscal 2023’s first half (1H FY2023) earnings ending 31 March 2023.

Revenue inched up 3.5% year on year to S$1.05 billion with gross profit increasing 3.8% year on year to S$296.6 million.

Net profit excluding exceptional items fell by 19.8% year on year to S$55 million.

Despite the fall in profit, F&N generated a positive free cash flow of S$71.5 million for 1H FY2023.

An interim dividend of S$0.015 was declared, similar to what was paid out a year ago.

F&N has secured extended rights for Nestle’s (SWX: NESN) Bear brand sterilised milk in Cambodia, helping to boost its market presence in Indochina.

These rights are effective until 2027.

The group also recently refreshed the packaging for its fresh milk and fresh soya milk cartons and has lined up a slew of sponsorships for this calendar year.

Delfi Ltd (SGX: P34)

Delfi manufactures branded consumer goods and has an established portfolio of chocolate confectionery brands such as SilverQueen and Ceres which are household names in Indonesia and the Philippines.

The group also distributes a portfolio of third-party agency brands in Indonesia, Malaysia, and the Philippines.

Delfi released its fiscal 2023 first quarter (1Q 2023) business update recently.

Revenue saw a 20.8% year-on-year jump to US$160.8 million, driven by the sale of premium products in Indonesia and its regional markets.

Gross profit margin also improved slightly from 29.1% in 1Q 2022 to 30.4% in the current quarter.

The group also generated a healthy free cash flow of S$19.8 million for 1Q 2023.

For 2022, Delfi declared a final dividend of US$0.02 and a special dividend of US$0.0072, taking the total dividend for the year to US$0.043.

The total dividend was nearly 52% higher than 2021 and the rise was in tandem with the group’s nearly 50% year on year jump in net profit to US$43.9 million for last year.

Old Chang Kee Ltd (SGX: 5ML)

Old Chang Kee, or OCK, manufactures and sells a variety of fried foods such as curry puffs, spring rolls, chicken nuggets and other delectable snacks.

The group also runs cafes such as Mushroom Café and Curry Times that serve local recipes to customers.

OCK released its fiscal 2023 (FY2023) earnings ending 31 March 2023 which saw revenue climb 15.9% year on year to S$89.8 million.

Gross profit improved by 17% year on year as the cost of sales only increased by 13.8% year on year.

Net profit increased by 8.4% year on year to S$6.2 million.

The F&B group generated a very healthy free cash flow of S$21 million for FY2023, 21.3% higher than the S$17.3 million generated in the prior year.

The group has declared a final dividend of S$0.01, unchanged from a year ago.

Together with the interim dividend of S$0.01, the total dividend for FY2023 comes up to S$0.02.

Food Empire Holdings Ltd (SGX: F03)

Food Empire is an F&B group with a portfolio comprising instant beverages, snack foods, and food ingredients.

The group also owns proprietary brands such as MacCoffee and CafePHO and has eight manufacturing facilities in five countries along with 23 offices worldwide.

Food Empire released an encouraging set of numbers for its 1Q 2023 business update.

Revenue climbed 24.2% year on year to US$102.6 million with gross profit jumping 43.2% year on year to US$36.6 million.

Net profit surged by 50.9% year on year to US$13.8 million.

The better performance was due to higher sales in its key regions of Russia and Ukraine plus Kazakhstan.

For its 2022 results, Food Empire declared and paid out a first and final dividend of S$0.044.

The group is expanding its non-dairy creamer factory and expects commercial production to commence in the fourth quarter of this year.

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Disclosure: Royston Yang owns shares of Delfi Ltd.

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