The Dogs and Puppies of STI is an annual blog series that I try to update at the start of every year. It can be very time-consuming to crunch all the data and analyse their performance relative to the STI, especially since there is only a very short time window between the end of the previous year and the start of trading in the new year. Nevertheless, I try to do my best every year. Here is the edition for 2017 and a review of the performance of the Dogs and Puppies of STI for 2016.
To recap, the Dogs and Puppies of STI for 2016 are as follows (see The Dogs and Puppies of STI for 2016 for more info):
To recap, the Dogs and Puppies of STI for 2016 are as follows (see The Dogs and Puppies of STI for 2016 for more info):
Puppies of STI 2016
- A-Reit
- Capitaland Mall Trust
- HPH Trust
- SembMar
- ST Engineering
- Keppel Corp
- SembCorp
- SPH
- Starhub
- UOB
You might have noticed that SembMar continues to be included as part of the Dogs and Puppies of STI for 2016 even though it was dropped from the STI in Sep 2016. This is because the concept behind the Dogs of the Dow theory is to buy the identified stocks and hold them for 1 year. Hence, its place among the Dogs and Puppies of STI is unaffected. From this year onwards, it will no longer be contending to be part of the Dogs and Puppies of STI.
How did the Dogs and Puppies perform in 2016? The results are shown below.
How did the Dogs and Puppies perform in 2016? The results are shown below.
| Price 31/12/15 | Price 31/12/16 | Div | Div Yield | Return (excl. Div) |
Return (incl. Div) |
|
| Puppies | ||||||
| A-Reit | $2.28 | $2.27 | 17.70 | 7.8% | -0.4% | 7.3% |
| CapitaMall | $1.93 | $1.89 | 11.23 | 5.8% | -2.3% | 3.5% |
| HPH Trust | $0.53 | $0.44 | 4.87 | 9.2% | -17.9% | -8.7% |
| SembMar | $1.75 | $1.38 | 12.00 | 6.9% | -21.1% | -14.3% |
| ST Engg | $3.01 | $3.23 | 16.00 | 5.3% | 7.3% | 12.6% |
| Non-Puppies | ||||||
| Kep Corp | $6.51 | $5.79 | 48.00 | 7.4% | -11.1% | -3.7% |
| SembCorp | $3.05 | $2.85 | 16.00 | 5.2% | -6.6% | -1.3% |
| SPH | $3.94 | $3.53 | 20.00 | 5.1% | -10.4% | -5.3% |
| StarHub | $3.70 | $2.81 | 20.00 | 5.4% | -24.1% | -18.6% |
| UOB | $19.61 | $20.40 | 110.00 | 5.6% | 4.0% | 9.6% |
| Dogs | 6.4% | -8.3% | -1.9% | |||
| Puppies | 7.0% | -6.9% | 0.1% | |||
| STI | 2882.73 | 2880.76 | 93.00 | 3.2% | -0.1% | 3.2% |
As
shown above, both the Dogs and Puppies underperformed the STI in 2016. Inclusive of dividends, the Dogs
returned -1.9% while the Puppies were almost unchanged at 0.1%. Both are worse than STI's 3.2%. Excluding dividends, the Dogs and Puppies did even worse. The Dogs returned -8.3% while the Puppies returned -6.9%, which is worse than STI's -0.1%.
The underperformance of the Dogs and Puppies relative to STI in 2016 reversed the overperformance in 2015. This underperformance is unexpected, as STI was virtually unchanged if dividends were not considered. Since the Dogs and Puppies contain REITs that pay high dividends, the Dogs and Puppies should in theory outperform the STI after the dividends are considered.
If you have been following this annual series of blog posts, you would know that I am not a fan of having REITs included in the STI. There are now 4 REITs/ business trusts in the STI, namely, A-Reit, Capitaland Comm Trust, Capitaland Mall Trust and HPH Trust. Since REITs/ business trusts pay high dividends, they naturally dominate the Dogs and Puppies.
For 2016, what would be the performance of the Dogs and Puppies if the REITs/ business trusts were excluded? The performance is as shown in the table below.
| Price 31/12/15 | Price 31/12/16 | Div | Div Yield | Return (excl. Div) |
Return (incl. Div) |
|
| Puppies | ||||||
| SembCorp | $3.05 | $2.85 | 16.00 | 5.2% | -6.6% | -1.3% |
| SembMar | $1.75 | $1.38 | 12.00 | 6.9% | -21.1% | -14.3% |
| SingTel | $3.70 | $3.65 | 17.50 | 4.7% | -1.4% | 3.4% |
| ST Engg | $3.01 | $3.23 | 16.00 | 5.3% | 7.3% | 12.6% |
| YZJ | $1.11 | $0.82 | 5.50 | 5.0% | -26.2% | -21.3% |
| Non-Puppies | ||||||
| Kep Corp | $6.51 | $5.79 | 48.00 | 7.4% | -11.1% | -3.7% |
| OCBC Bk | $8.80 | $8.92 | 36.00 | 4.1% | 1.4% | 5.5% |
| SPH | $3.94 | $3.53 | 20.00 | 5.1% | -10.4% | -5.3% |
| StarHub | $3.70 | $2.81 | 20.00 | 5.4% | -24.1% | -18.6% |
| UOB | $19.61 | $20.40 | 110.00 | 5.6% | 4.0% | 9.6% |
| Dogs | 5.5% | -8.8% | -3.3% | |||
| Puppies | 5.4% | -9.6% | -4.2% | |||
| STI | 2882.73 | 2880.76 | 93.00 | 3.2% | -0.1% | 3.2% |
Moving on to 2017, the table below shows the dividend yields of STI component stocks in descending order:
| Counter | Div (cents) | Price 31/12/16 | Div Yield | Remarks |
| HPH Trust US$ | 4.19 | $0.44 | 9.64% | Puppy |
| StarHub | 20.00 | $2.81 | 7.12% | Dog |
| CapitaMall | 11.13 | $1.89 | 5.90% | Puppy |
| CapitaComm | 8.70 | $1.48 | 5.88% | Puppy |
| YZJ | 4.50 | $0.82 | 5.52% | Puppy |
| A-Reit | 12.19 | $2.27 | 5.37% | Puppy |
| Kep Corp | 30.00 | $5.79 | 5.18% | Dog |
| SPH | 18.00 | $3.53 | 5.10% | Dog |
| SingTel | 17.50 | $3.65 | 4.79% | Dog |
| ST Engg | 15.00 | $3.23 | 4.64% | Dog |
| SIA | 44.00 | $9.67 | 4.55% | |
| OCBC Bk | 36.00 | $8.92 | 4.04% | |
| SGX | 28.00 | $7.16 | 3.91% | |
| ComfortDelGro | 9.25 | $2.47 | 3.74% | |
| SIA Engg | 12.00 | $3.37 | 3.56% | |
| SembCorp | 10.00 | $2.85 | 3.51% | |
| DBS | 60.00 | $17.34 | 3.46% | |
| UOB | 70.00 | $20.40 | 3.43% | |
| Genting SP | 3.00 | $0.91 | 3.31% | |
| SATS | 16.00 | $4.85 | 3.30% | |
| ThaiBev | 2.67 | $0.85 | 3.14% | |
| HKLand US$ | 19.00 | $6.33 | 3.00% | |
| Capitaland | 9.00 | $3.02 | 2.98% | |
| GLP | 6.00 | $2.20 | 2.73% | |
| JMH 400US$ | 145.00 | $55.25 | 2.62% | |
| UOL | 15.00 | $5.99 | 2.50% | |
| Wilmar | 8.00 | $3.59 | 2.23% | |
| CityDev | 16.00 | $8.28 | 1.93% | |
| Jardine C&C | 69.00 | $41.23 | 1.67% | |
| GoldenAgri | 0.50 | $0.43 | 1.17% |
Puppies of STI 2017
- A-Reit
- Capitaland Comm Trust
- Capitaland Mall Trust
- HPH Trust
- Yangzijiang
Other Dogs of STI 2017
- Keppel Corp
- SingTel
- SPH
- Starhub
- ST Engineering
So far, since 2014, STI has won twice while the Dogs & Puppies have won 1 time. STI has won when it rose (2014) or was flat (2016) and lost when it fell (2015). Which will win in 2017? Let us see in 2017!
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