Put it this way, high dividend yield must be accompanied by high quality businesses with a durable competitive advantage.

When I look at dividend stocks as a Singapore investor, I often compare businesses that pay dividends that are well secured by a consistent free cash flow.

For example, what’s different is dividend growers like Sheng Siong produce free cash flow and pay dividends within its reasonable range.

 Despite market cycles, this supermarket giant continues to grow its dividends and earnings year after year. In fact, it’s now earning close to S$150 million in a single year.

However, given the intense competition, it’s hard to say whether a high dividend yield is still secured by free cash flow. It’s even harder to beat inflation if a company’s dividends are affected by intense competition like  the war that prolong for months that affect the stock earning effect