Singapore Telecommunications Limited (SGX: Z74) and StarHub Ltd(SGX: CC3) are two of the three main telcos operating in Singapore.

Both Singtel and StarHub offer dividend yields that are high, compared to the market average. As such, investors who are interested in those two companies may be thinking which telco would make a better income stock. To answer that, let's compare their dividend yields, dividends historical growth rates, and dividend payout ratios.  

Dividend Yield

Singtel closed at S$3.23 per share on Friday, giving it a trailing dividend yield of 5.4%, excluding special dividends. On the other hand, StarHub last exchanged hands on Friday at S$1.69 per share, translating to a trailing dividend yield of 9.5%. Looking at dividend yield alone, StarHub appears to be the better buy.  

Dividend growth rate

The dividend yield tells us what a telco has paid over the last twelve months, but we should also be looking at how the telcos’ dividends have grown over the past five years.