KUALA LUMPUR (Feb 5): Amid heightened market uncertainty driven by the US exceptionalism and trade tariff policies, investors may be looking to seek shelter in dividend yield stocks. 

The Edge compiled a list of big-cap stocks that have a forward dividend yield of more than 5% on Bloomberg.

Based on the data compiled, Genting Malaysia Bhd (KL:GENM), Sime Darby Bhd (KL:SIME) and RHB Bank Bhd (KL:RHBBANK) offer the highest dividend yield among super large-cap stocks with market capitalisation (cap) above RM10 billion. 

Genting Malaysia’s forward dividend yield is at 7.1% followed by Sime Darby 6.55% and RHB Bank Bhd 6.26%.

Genting Malaysia, which was removed from the FBM KLCI in December last year, has fallen 20% since then. That explains the high dividend yield. 

However, Phillip Capital head of research Tan Jian Yuan sees the likelihood of Genting Malaysia paying a higher dividend in 2025 amid expectation that the casino operator’s free cash flow will improve given its monopoly status.

Tan believes there could be potential re-rating catalysts for Genting Malaysia, should it be awarded the New York City casino licence, which is expected to be by year-end. 

Banks also offer decent dividend yields. 

Tan believes that RHB could afford to raise its dividend payout considering it is well-capitalised with a Tier-1 capital ratio of 16.6%. In fact, RHB’s yield is already the highest among its banking peers

Malacca Securities Sdn Bhd head of research Loui Low favoured Malayan Banking Bhd (KL:MAYBANK) due to its entrenched position in Malaysia. Tan concurs with the view noting that investors should take advantage of Maybank's recent share price weakness that provides opportunities to accumulate, and shelter amidst market volatility.

Meanwhile, Bloomberg data indicated that analysts anticipate Sime Darby’s dividend per share to rise by 10.8% in 2025, the biggest increase among the super large-cap stocks. This was enabled by its expanded base after the completion of acquisition of UMW Holdings Bhd in March last year.

Among companies with a market capitalisation between RM1 billion and RM10 billion, Bermaz Auto Bhd (KL:BAUTO) leads the list in terms of dividend yield. 

Bermaz’s dividend yield is at 12.7% as its share price has been down 43% over the past 12 months amid concerns on the rising competition in the local automotive market, largely caused by the influx of Chinese electric vehicles.

Nevertheless, Apex Securities head of research Kenneth Leong likes Bermaz Auto simply because of its strong balance sheet with a cash position of RM450 million and consistent earnings performance. He also noted that the company has been paying above its dividend policy of 60% payout ratio.

MBM Resources Bhd’s (KL:MBMR) dividend yield is the second highest yield at 8.99%, even with its share price rising 37% in the past year. Malacca Securities’s Low said MBM Resources is the proxy to Perodua car sales which tend to be resilient despite the intensifying competition among the non-national marques.

Apart from MBM Resources, other large-cap companies that offer high yields but not a result of share price drop, include Hong Leong Industries Bhd (KL:HLIND), Malakoff Corp Bhd (KL:MALAKOF), Gas Malaysia Bhd (KL:GASMSIA), Kerjaya Prospek Group Bhd (KL:KERJAYA), IGB REITs Bhd (KL:IGBREIT) and Sunway REITs Bhd (KL:SUNREIT). 

These stocks have climbed more than 20% in the past 12 months. 

British American Tobacco Bhd (KL:BAT)’s dividend yield is at 8.16%. Despite the high yield, a structural decline from the shrinking combustible tobacco market in Malaysia and competition from electronic cigarettes may not make the tobacco player attractive to investors. Over the past ten years, the tobacco company’s revenue has been on a downtrend while its profit margin has been shrinking.

There were seven real estate investment trusts (REITs) that yielded more than 5% dividend with market cap of above RM1 billion. 

According to Malacca Securities’s Low most of the trusts have seen higher rental reversions especially footfall has recovered to post-pandemic level. IGB Commercial REITs (KL:IGBCR), CapitaLand Malaysia Trust (KL:CLMT) and YTL Hospitality REITs (KL:YTLREIT) are the highest yielding large cap REITs at 7.41%, 7.01% and 6.92% respectively.

Apex’s Leong also highlighted Kim Loong Resources Bhd (KL:KMLOONG) which holds a forward dividend yield of 5.98%. He noted that the plantation company was equipped with a strong cash position of RM488 million and has distributed 85-99% of their net profit as dividends over the past four financial years.