4 Singapore Blue-Chip Stocks Suitable for the Sandwich Generation
It can be tough juggling the demands of your children while taking care of your ageing parents.
Also known as the “sandwich generation”, this segment comprises mainly working professionals in their 30s to 40s.
With prices heading higher in Singapore due to inflation, this group is facing more financial stress.
It can be an uphill task in trying to grow your savings for retirement with expenses and responsibilities piling up.
That’s why it is a good idea to seek out dependable blue-chip stocks that can offer both growth and dividends.
The growth angle will ensure that you are on a financially firmer footing as you build your retirement fund.
Dividends provide a layer of passive income that can help to defray higher costs.
Here are four blue-chips stocks that can provide you with this attractive mix.
Venture Corporation Limited (SGX: V03)
Venture is a provider of technology products, services, and solutions.
The group manages a portfolio of more than 5,000 products and solutions and employs more than 12,000 people worldwide.
Venture reported a sparkling set of earnings for the first nine months of 2022 (9M2022).
Revenue climbed 28% year on year to S$2.8 billion while net profit increased by 24.9% year on year to S$271.7 million.
The group saw broad-based growth across all of its domains with its business diversified across more than 100 customers.
Venture also has no debt on its balance sheet, thus insulating it from rising interest rates.
The technology services company seeks to expand its capabilities and strengths to capture more business in the future.
Back in August last year, Venture paid out an interim dividend of S$0.25.
Together with 2021’s final dividend of S$0.50, its trailing 12-month dividend stands at S$0.75, giving its shares a trailing dividend yield of 4%.
DBS Group (DGS: D05)
DBS needs no introduction, being Singapore’s largest bank by market capitalisation.
The lender saw its third-quarter 2022 (3Q2022) net profit hit a new all-time high of S$2.2 billion.
DBS’ net interest margin has also surged from 1.43% a year ago to 1.9% in 3Q2022 in line with higher interest rates.
CEO Piyush Gupta foresees the bank’s net interest margin reaching around 2.25% by mid-2023 if the US Federal Reserve’s benchmark rate hits 4.75%.
Just last week, the US central bank hiked interest rates by another 0.25%, bringing its benchmark rate to a range of 4.5% to 4.75%.
Hence, there is a high chance that DBS can see its net interest margin head higher when it releases its fourth-quarter results on February 13, boosting its overall income and pushing net profit even higher.
DBS paid out an interim dividend of S$0.36 for 3Q2022, and its forward dividend yield based on a full-year dividend of S$1.44 comes in at 4%.
Keppel DC REIT (SGX: AJBU)
Let’s not forget that the REIT sector can also provide a great combination of growth and dividends.
One example is Keppel DC REIT, which owns a portfolio of 23 data centres across nine countries.
The data centre REIT reported a commendable set of earnings for fiscal 2022 (FY2022), with revenue inching up 2.3% year on year to S$277.3 million.
Net property income rose 1.8% year on year to S$252.5 million and distribution per unit (DPU) improved by 3.7% year on year to S$0.10214.
Keppel DC REIT’s units provide a trailing distribution yield of 5%.
The REIT has an unbroken track record of rising DPU since its IPO in December 2014.
With an aggregate leverage of 36.4% and a low cost of debt of just 2.2%, the REIT looks well-positioned for further DPU and asset growth through debt-funded acquisitions.
Genting Singapore (SGX: G13)
Genting Singapore owns and operates the integrated resort (IR) at Resorts World Sentosa (RWS).
The IR consists of a casino, around 1,600 hotel rooms across six hotels, a Universal Studios theme park, and one of the world’s largest aquariums.
Genting Singapore reported a sparkling set of financial numbers for 3Q2022 as borders reopened and tourists started travelling in earnest.
Total revenue more than doubled year on year from S$251.5 million to S$519.7 million.
Net profit surged from S$60.7 million to S$135.8 million during the quarter.
The IR operator paid out a trailing 12-month dividend of S$0.02, translating to a trailing dividend yield of 2% on its shares.
With the significantly better results, there’s a chance that Genting Singapore may raise its dividend when it releases its FY2022 results on 20 February.
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Disclosure: Royston Yang owns shares of DBS Group and Keppel DC REIT.
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