Their total returns may be negative for the year so far, but Singapore's three telco stocks continue to deliver dividend and free cash flow yields above the regional average for such shares.
Singtel mantains a dividend yield of 4.9 per cent, while StarHub is at 5.6 per cent and M1 at 6 per cent. All three telcos beat the average dividend yield of 4.4 per cent for Asean telcos, an SGX My Gateway report noted yesterday .
StarHub distributes dividends quarterly, while Singtel and M1 pay out semi-annually.
Singtel, StarHub and M1 also maintain free cash flow yields far above the -1.6 per cent average of 39 Asean telcos. Singtel's is at 5 per cent, StarHub is at 3.6 per cent and M1 at 4.4 per cent.
Free cash flow yield is a measure of how much cash a company generates from its main operations, expressed as a proportion of its market capitalisation.
Free cash is the amount of cash a company has left over after subtracting capital expenditures and working capital over the past 12 months.
Together, Singtel, StarHub and M1 account for 28.4 per cent of the total market capitalisation of the Asean telecommunications sector.
Singtel had a market value of $56.4 billion as at the close of the market yesterday, StarHub was at $6.2 billion and M1 $2.4 billion.
The three telcos have averaged a total return of -3.7 per cent this year and a five-year total return of 57.7 per cent.
All three stocks reached 52-week lows last month as the market braces for possible new competition from a fourth telco when authorities hold a mobile spectrum auction later this year. Singtel's stock price is down 3.54 per cent from the end of December while StarHub has shed 2.97 per cent and M1 has slumped 6.25 per cent.
An OCBC Investment Research report yesterday said that Singtel is likely to be the least affected if a new telco contender emerges, "given its dominant position in the post-paid market and also pre-paid segment".
Singtel releases its third quarter results before trading hours today.