Paid Dividends for 10 Years. Still Lost.

Imagine buying a stock that paid you a dividend every single year for 10 years. No missed years. Cash in your account, again and again.

By the end, those dividends add up to 32% of what you paid. Sounds like a great investment, right?

Except over the same 10 years, the share price fell 48%. Add the two together and you're still down about 16%.

That's not a made-up example. It's ComfortDelGro, the company behind Singapore's blue taxis and two of its MRT lines. A lot of people bought it for one reason: the dividends.

Bought 11 Nov 2016 at S$2.46, valued 11 Nov 2026 at S$1.29. Dividends from ComfortDelGro's investor relations page, price chart from TradingView.

The hidden variable

What you actually earn from a dividend stock is:

Dividends + what happens to the price.

That's it. Simple, but most dividend investors only ever look at the first half. The price is the hidden variable.

If the price goes up, great, you win twice. But if the price goes down, the dividend is basically just handing you some of your own money back.

A 6% yield feels like 6% a year in your pocket. It isn't, if the price is quietly sliding 8% a year underneath it.

It's not just one stock

I ran the same check on a few other popular Singapore holdings. Say you bought each one, kept every dividend as cash (no reinvesting), and held until today. Here's how the price moved, how much the dividends added up to, and the two together: what you actually made or lost.

All % are of the price you paid. Price: how much the share price rose or fell. Dividends: every dividend collected over the period, added up and divided by the price you paid. Total: the two added together. 10 years = bought 11 Nov 2016; 5 years = bought 12 Nov 2021; both valued at the 11 Nov 2026 close. Prices: Google Finance. Dividends: company and fund payout records.

Look at the last two rows. The "boring" index fund has the lowest yield today, about 3.3%, against 5-7% for the REITs. Yet it did by far the best over the past 5-10 years.

Two reasons. Its price went up instead of down. And its payouts grew over the years, so measured against what you originally paid, the dividends actually worked out to about 4.5% a year. That's more than what the REITs ETF gave their holders.

SingPost is the harsh one. Fewer people send letters, and parcels are a tougher business. The dividends paid back 17%, but you'd have less than 40% of your money left after 10 years.

The REITs are a different story. They're big, well-run trusts. But when interest rates jumped in 2022, they got hit twice: borrowing got more expensive, and a "safe" 5% suddenly didn't look special when a fixed deposit or bonds paid nearly the same.

The second risk: the dividend itself stops

Then there's the risk people don't think about when they plan to live off dividends. What if the dividend gets cut?

When COVID hit in 2020, a lot of Singapore's biggest payers cut theirs:

Dividends declared per financial year, 2019 vs 2020 (Singtel FY2019 vs FY2021). Source: company annual reports and results. Even the banks cut: the regulator asked them to cap 2020 dividends at 60% of the year before.

Imagine you were retired, living off that income, and overnight a big chunk of it disappears.

But here's the part I find more useful: a cut on its own isn't the end of the world. What matters is what happens after.

DBS was paying more than its pre-COVID dividend within about two years. ComfortDelGro still pays less today than it did before COVID. Same crisis, very different businesses.

That's why the yield on its own tells you so little. It tells you what a company paid in the good years. It doesn't tell you what it'll pay in a bad one.

What I'd check instead

If the yield isn't the answer, what is? The business. A dividend is just a slice of the profit, so if the business shrinks, the dividend shrinks with it sooner or later.

So before I trust a dividend, I run five quick checks:

1. Is the business growing? Or slowly shrinking, like fewer letters to deliver.

2. Does it earn a good return on your money?

3. Is the dividend covered? Paid from profit, not stretched.

4. Is the debt safe? Heavy debt is what forces cuts when rates rise or profits dip.

5. What happened in a crisis? Did the dividend come back?

None of this needs a finance degree. It's mostly a habit: stop looking at the yield first.

I turned these into a free, 7-page Dividend Quality Checklist, with simple pass marks for companies, banks and REITs, four real examples worked through (DBS, CapitaLand Integrated Commercial Trust, Sheng Siong, and SingPost, the one that fails), and a blank scorecard for your own stock. You can get it here.

The bottom line

A high yield looks great on paper. But what you actually earn is the dividend plus what happens to the price, and the price only holds up if the business holds up.

So I'd rather own a good business at a fair price, and collect a slightly smaller dividend that grows, than chase the biggest number on the screen.

That's all for this one.

Charlie

For educational purposes only, not financial advice or a recommendation to buy or sell any security. Past results don't guarantee future returns. Do your own research or speak to a licensed advisor. I may hold positions in the securities mentioned.