The Dogs of STI replicates the investment strategy of the Dogs of the Dow. Since 2014, I have been analysing the performance of the Dogs of the Dow strategy as applied to STI (known as the Dogs and Puppies of STI) for the past year and identifying the new Dogs and Puppies for the current year.
The Dogs and Puppies of STI for 2017 are as follows (see The Dogs and Puppies of STI for 2017 for more info):
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
How did the Dogs and Puppies of STI perform in 2017? The table below shows their performance relative to STI.
| Price 31/12/16 | Price 31/12/17 | Div | Div Yield | Return (excl. Div) |
Return (incl. Div) |
|
| Puppies | ||||||
| A-Reit | $2.27 | $2.72 | 10.07 | 4.4% | 19.8% | 24.3% |
| CapitaComm | $1.48 | $1.93 | 9.25 | 6.3% | 30.4% | 36.7% |
| CapitaMall | $1.89 | $2.13 | 11.14 | 5.9% | 13.0% | 18.9% |
| HPH Trust | $0.44 | $0.42 | 3.35 | 7.7% | -4.6% | 3.1% |
| YZJ | $0.82 | $1.47 | 4.00 | 4.9% | 80.4% | 85.3% |
| Non-Puppies | ||||||
| Keppel Corp | $5.79 | $7.35 | 20.00 | 3.5% | 26.9% | 30.4% |
| SingTel | $3.65 | $3.57 | 20.50 | 5.6% | -2.2% | 3.4% |
| SPH | $3.53 | $2.65 | 15.00 | 4.2% | -24.9% | -20.7% |
| ST Engg | $3.23 | $3.26 | 15.00 | 4.6% | 0.9% | 5.6% |
| Starhub | $2.81 | $2.85 | 17.00 | 6.0% | 1.4% | 7.5% |
| Dogs | 5.3% | 14.1% | 19.4% | |||
| Puppies | 5.8% | 27.8% | 33.6% | |||
| STI | 2880.76 | 3402.92 | 101.00 | 3.5% | 18.1% | 21.6% |
As shown above, the Dogs (both Puppies and Non-Puppies together) underperformed the STI whereas the Puppies outperformed it. Inclusive of dividends, the Dogs returned 19.4% while the Puppies returned 33.6%, against STI's returns of 21.6%. The same trend is observed for the performance excluding dividends.
This is the first time when the Dogs and Puppies as a whole neither outperform nor underperform the STI. In all past years, both either outperformed or underperformed the STI. So far, since 2014, STI has won twice (2014 and 2016), the Dogs and Puppies have won once (2015) and 2017 is a draw, with the Puppies beating the STI while the Dogs losing to it. The performance (inclusive of dividends) for the past years is summarised below.
The strong performance of the Puppies in 2017 is due to the rise of Yangzijiang and the REITs. The REITs and business trusts (i.e. HPH Trust) are regulars in the Dogs and Puppies due to their high dividends and low prices. What would happen if we exclude the REITs and business trusts from the Dogs and Puppies? Would the No-REIT Dogs and Puppies perform as well? Their performance is as shown below.
| Year | STI | Dogs | Puppies |
| 2014 | 9.0% | 6.2% | 6.1% |
| 2015 | -11.5% | -8.6% | -4.0% |
| 2016 | 3.2% | -1.9% | 0.1% |
| 2017 | 21.6% | 19.4% | 33.6% |
| Price 31/12/16 | Price 31/12/17 | Div | Div Yield | Return (excl. Div) |
Return (incl. Div) |
|
| Puppies | ||||||
| ComfortDelGro | $2.47 | $1.98 | 10.40 | 4.2% | -19.8% | -15.6% |
| SPH | $3.53 | $2.65 | 15.00 | 4.2% | -24.9% | -20.7% |
| ST Engg | $3.23 | $3.26 | 15.00 | 4.6% | 0.9% | 5.6% |
| Starhub | $2.81 | $2.85 | 17.00 | 6.0% | 1.4% | 7.5% |
| YZJ | $0.82 | $1.47 | 4.00 | 4.9% | 80.4% | 85.3% |
| Non-Puppies | ||||||
| Keppel Corp | $5.79 | $7.35 | 20.00 | 3.5% | 26.9% | 30.4% |
| OCBC | $8.92 | $12.39 | 36.00 | 4.0% | 38.9% | 42.9% |
| SGX | $7.16 | $7.44 | 28.00 | 3.9% | 3.9% | 7.8% |
| SIA | $9.67 | $10.67 | 21.00 | 2.2% | 10.3% | 12.5% |
| SingTel | $3.65 | $3.57 | 20.50 | 5.6% | -2.2% | 3.4% |
| Dogs | 4.3% | 11.6% | 15.9% | |||
| Puppies | 4.8% | 7.6% | 12.4% | |||
| STI | 2880.76 | 3402.92 | 101.00 | 3.5% | 18.1% | 21.6% |
Both the No-REIT Dogs and Puppies collectively underperformed the STI and the original Dogs and Puppies. Thus, for 4 years in a row, the original Dogs and Puppies beat the No-REIT Dogs and Puppies. Perhaps the original Dogs of Dow theory should not be tinkered with.
Moving on to 2018, the table below shows the dividend yields of STI component stocks in descending order:
| Counter | Div (cents) |
Price 31/12/17 |
Div Yield | Remarks |
| HPH Trust US$ | 3.35 | $0.42 | 8.06% | Puppy |
| Starhub | 17.00 | $2.85 | 5.96% | Dog |
| SingTel | 20.50 | $3.57 | 5.74% | Dog |
| SPH | 15.00 | $2.65 | 5.66% | Puppy |
| ComfortDelGro | 10.40 | $1.98 | 5.25% | Puppy |
| CapitaMall | 11.14 | $2.13 | 5.23% | Puppy |
| CapitaComm | 9.25 | $1.93 | 4.79% | Puppy |
| ST Engg | 15.00 | $3.26 | 4.60% | Dog |
| SGX | 28.00 | $7.44 | 3.76% | Dog |
| A-Reit | 10.07 | $2.72 | 3.70% | Dog |
| GoldenAgri | 1.33 | $0.37 | 3.59% | |
| SATS | 17.00 | $5.20 | 3.27% | |
| OCBC | 36.00 | $12.39 | 2.91% | |
| Capitaland | 10.00 | $3.53 | 2.83% | |
| Keppel Corp | 20.00 | $7.35 | 2.72% | |
| YZJ | 4.00 | $1.47 | 2.72% | |
| HKLand US$ | 19.00 | $7.04 | 2.70% | |
| ThaiBev | 2.47 | $0.92 | 2.68% | |
| UOB | 70.00 | $26.45 | 2.65% | |
| DBS | 63.00 | $24.85 | 2.54% | |
| JMH US$ | 152.00 | $60.75 | 2.50% | |
| SembCorp | 7.00 | $3.03 | 2.31% | |
| Genting SP | 3.00 | $1.31 | 2.29% | |
| Wilmar | 7.00 | $3.09 | 2.27% | |
| SIA | 21.00 | $10.67 | 1.97% | |
| JC&C | 74.00 | $40.67 | 1.82% | |
| GLP | 6.00 | $3.37 | 1.78% | |
| UOL | 15.00 | $8.87 | 1.69% | |
| CityDev | 16.00 | $12.49 | 1.28% | |
| JSH US$ | 30.50 | $39.58 | 0.77% |
Just to recap, the Dogs of STI are the 10 highest-yielding dividend
stocks in the STI, while the Puppies of STI are the 5 lowest-priced
stocks among the Dogs of STI. Thus, the Dogs and Puppies of STI for 2018 are as follows:
There is an interesting observation for the Dogs and Puppies of 2018. A-Reit, which has been a Puppy for many years like all other REITs given their relatively lower prices, has risen from a Puppy to become a Dog after rising 19.8% in 2017 while SPH has dropped from a Dog to become a Puppy after falling 24.9% over the same period. Is this a sign that the REITs have run up too much and due for a correction? We shall see in 2018.
See related blog posts:
Puppies of STI 2018
- Capitaland Comm Trust
- Capitaland Mall Trust
- ComfortDelgro
- HPH Trust
- SPH
Other Dogs of STI 2018
- A-Reit
- SGX
- SingTel
- Starhub
- ST Engineering
There is an interesting observation for the Dogs and Puppies of 2018. A-Reit, which has been a Puppy for many years like all other REITs given their relatively lower prices, has risen from a Puppy to become a Dog after rising 19.8% in 2017 while SPH has dropped from a Dog to become a Puppy after falling 24.9% over the same period. Is this a sign that the REITs have run up too much and due for a correction? We shall see in 2018.
See related blog posts:
