3 Blue-Chip Companies with Attractive Dividend Yields

Blue-chip companies evoke images of stability and strength.

This is not surprising as the term “blue-chip” refers to a business that has grown over many years to become what it is today.

It’s no wonder, then, that blue-chip companies are highly sought after by investors.

I would add that it’s a bonus if a great blue-chip company also pays out dividends.

As COVID-19 is now ravaging the economy, dividends can also help to augment your cash flow while we wait for a recovery.

Here are three blue-chip companies with attractive dividend yields that you should add to your watchlist.

Singapore Exchange Limited (SGX: S68)

Singapore Exchange Limited, or SGX, is a multi-asset exchange that also functions as Singapore’s sole stock exchange.

SGX offers a wide range of securities on its platform, including equities, fixed income and derivatives.

The bourse operator also offers listing, settlement and clearing services to augment its platform.

SGX had reported a sparkling set of earnings for its full fiscal year ended 30 June 2020.

Revenue was up 16% year on year to a record high of S$1.05 billion.

Net profit jumped 21% year on year to S$472 million, driven by growth across all the group’s business units.

During the fiscal year, SGX expanded its product range and expanded its platform’s capabilities, drawing in a wider group of new customers.

The group also acquired Scientific Beta and BidFX to expand its range of services for clients.

Looking ahead, CEO Loh promises that SGX will have a new and expanded suite of derivative products well ahead of the expiry of its partnership with MSCI on non-Singapore product licences.

SGX bumped up its final dividend to S$0.08 and will be paying an annual dividend of S$0.32 in the new fiscal year.

At the last traded share price of S$8.64, SGX is offering a dividend yield of 3.7%.

Singapore Technologies Engineering Ltd (SGX: S63)

Singapore Technologies Engineering, or STE, is a global technology, defence and engineering group employing around 23,000 people.

The group has four key divisions – aerospace, electronics, land systems and marine.

For the fiscal year 2019, STE reported a 17% year on year jump in revenue to S$7.9 billion, while net profit attributable to shareholders also increased by 17% year on year.

The engineering giant declared a final dividend of S$0.10, taking the total dividend for the year to S$0.15.

At the last traded share price of S$3.22, the shares provide a trailing 12-month dividend yield of 4.7%.

In a business update for the first quarter of 2020, STE touted its diverse revenue streams that help to cushion the negative impact from COVID-19.

The group’s aerospace and electronics divisions also secured S$1.6 billion of new contracts in the first quarter, underscoring the defensive nature of the business.

Venture Corporation Ltd (SGX: V03)

Venture is a provider of technology products, solutions and services with a range of capabilities across product refurbishment and technical support.

The group manages a portfolio of more than 5,000 products and solutions and employs over 12,000 people worldwide.

Venture released its first-half fiscal year 2020 earnings report on Friday.

It was not a pretty picture, as revenue fell 25% year on year to S$1.4 billion.

Net profit after tax declined 28% year on year to S$130.6 million.

The main cause of the poor performance was disruptions to the global supply chain and factory lockdowns in countries such as Malaysia, Spain, US and China due to COVID-19.

Orders from customers in non-essential segments were delayed to later quarters.

However, the group sounded a note of optimism about prospects for the second half of 2020 as a steady recovery has been witnessed.

Venture’s research and development laboratories also have plans to release a number of newly-developed products into manufacturing in early 2021 to drive revenues.

Although net profit fell, free cash flow remained strong at S$265.7 million for the first half.

The group upped its interim dividend from S$0.20 last year to S$0.25.

Together with last year’s final dividend of S$0.50, the trailing 12-month dividend stands at S$0.75.

Venture’s dividend yield was around 4% based on its last traded share price of S$18.84.

Download your FREE special REITs report: “How You Can Make Money Investing In REITs During This Pandemic” HERE or in the box below.

We cover the pandemic’s impact on REITs in Singapore, and dive into the different sectors of Hospitality REITs, Retail REITs, Commercial REITs, Industrial REITs, Healthcare REITs.

Disclaimer: Royston Yang owns shares in Singapore Exchange Limited.

The post 3 Blue-Chip Companies with Attractive Dividend Yields appeared first on The Smart Investor.