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4 Singapore Blue-Chip Stocks Offering a Great Mix of Growth and Dividends

Solar Panels and Wind Farm
Solar Panels and Wind Farm

Blue-chip stocks are well-known for their resilience and their ability to weather adversity.

They are also recognised for their astute management teams that can deliver sustainable returns for investors.

Most of the blue-chip companies also pay out a dividend that acts as a useful source of passive income.

This passive income can help to supplement your active income and also acts as a reliable flow of money during your retirement years.

Blue-chip stocks do not just provide dividends though; some of them also offer healthy growth prospects.

In essence, investors can enjoy the best of both worlds with a healthy mix of income and capital appreciation.

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Here are four Singapore blue chips that fit this bill.

DBS Group (SGX: D05)

DBS needs no introduction, being Singapore’s largest bank by market capitalisation.

The lender had reported a sparkling set of earnings for its recent fiscal 2023 first quarter (1Q 2023).

Net profit hit a record high of S$2.57 billion, buoyed by high-interest rates that benefitted its net interest margin (NIM).

DBS also raised its quarterly dividend by 16.7% from S$0.36 to S$0.42.

The bank’s share price has shown healthy growth over the past decade, rising from around S$16.00 to the current S$31.16.

This works out to be a compound annual growth rate (CAGR) of around 6.9%.

The group’s annual dividend has also nearly tripled from just S$0.58 in 2013 to the current S$1.68.

Looking ahead, DBS expects its NIM to hover around 2.05% to 2.1% while also expecting low-single-digit low growth.

Fee income is projected to grow by high-single-digit year on year as wealth management and investment banking recover.

Its digital exchange, which was started back in 2020, also saw an 80% year on year jump in the amount of Bitcoin traded for 2022.

Genting Singapore (SGX: G13)

Genting Singapore owns and operates the integrated resort (IR) at Resorts World Sentosa (RWS).

The resort opened in 2010 and now features around 1,600 hotel rooms, a casino, a Universal Studio Singapore (USS) theme park, and a variety of retail, dining, and entertainment options.

The group is seeing a strong surge in revenue and profit from the reopening of borders.

Air travel and tourism have returned with a bang and benefitted the IR operator immensely.

Genting Singapore reported a robust set of earnings for 2022 and doubled its final dividend to S$0.02.

2022’s total dividend came up to S$0.03, giving its shares a trailing dividend yield of 3.1%.

The growth momentum is continuing into 1Q 2023 with the group reporting a 54% year on year surge in revenue to S$484.5 million.

Net profit for the period more than tripled year on year from S$40.4 million to S$129.2 million.

In line with its RWS 2.0 strategic plans, the group has rebranded Festive Hotel as Hotel Ora and added 389 rooms to its inventory with a soft launch in April this year.

Ongoing construction works are proceeding smoothly for the USS theme park and new Singapore Oceanarium with a soft opening scheduled for early 2025.

Mapletree Logistics Trust (SGX: M44U)

Mapletree Logistics Trust, or MLT, is an industrial REIT with a portfolio of 185 properties spread out across eight countries.

Assets under management stood at S$12.8 billion as of 31 March 2023.

For its fiscal 2023 (FY2023) ending 31 March, gross revenue increased by 7.7% year on year to S$730.6 million while net property income increased by 7.2% year on year to S$634.8 million.

Distribution per unit (DPU) edged up 2.5% year on year to S$0.09011, capping off an impressive track record of seven consecutive increases.

There may be more to come as MLT reported a healthy positive average rental reversion of 3.1% for the quarter.

Portfolio occupancy also stood high at 97% and the REIT has hedged 84% of its debt on fixed rates.

Just two months ago, MLT pulled off a major acquisition of eight properties in a S$946.8 million transaction.

The logistics REIT also has an ongoing asset enhancement initiative for a redevelopment project at 51 Benoi Road that will increase its gross floor area by 2.3 times.

This project is expected to complete by the first quarter of 2025.

Sembcorp Industries Ltd (SGX: U96)

Sembcorp Industries, or SCI, is a utility and urban development group.

The group delivered a strong financial performance for 2022 as it tripled its net profit and generated a positive free cash flow of S$1 billion.

SCI also more than doubled its 2022 dividend from S$0.05 to S$0.12, inclusive of a S$0.04 special dividend paid out.

The group has announced several promising business developments in the past month.

Last month, SCI signed a 10-year power purchase agreement to supply electricity to Singtel (SGX: Z74) commencing 1 October this year.

The annual contract value is estimated at S$180 million and will boost earnings for this financial year.

Meanwhile, the utility group also confirmed that it is exploring the potential sale of SembWaste, its waste management arm.

Elsewhere, SCI signed a new gas sales agreement with a subsidiary of PT Medco Energi Internasional Tbk (IDX: MEDC) to import natural gas at an estimated contract value of S$1.9 billion.

Delivery of the gas will commence in 2024 and last for four years.

Our team has spent decades scouring SGX for stocks. And we think dividends could be the answer to rising inflation and market uncertainty in 2023. With our newest FREE report, you’ll have everything you need to find, keep and make more money from dividend stocks. Click here to download it for free.

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Disclosure: Royston Yang owns shares of DBS Group.

The post <strong>4 Singapore Blue-Chip Stocks Offering a Great Mix of Growth and Dividends</strong> appeared first on The Smart Investor.