The Straits Times Index (STI) component stocks are essentially blue chips. I was quite taken aback when I saw the index dividend yield was almost 5% as of the market close on 20 Mar 2020! See below for the STI ETF with a dividend yield of 4.94% and a PE ratio of 9. Dividend Yield is a crude way to tell us whether a stock is cheap or expensive. Simply refer to the formula below.

For the yield to be high, either the dividends per share has to be high or the share price has to be low. Given that the dividends per share has been stable and only changes once a year, the spike in dividend yield among the blue chips has to be due to lower share prices. But of course we can argue that the market is pricing in the poorer business sentiments in advance. The dividend yield would fall when the businesses distribute lower dividends per share in the future....