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5 Worry-Free Singapore Stocks You Can Park in Your CPF Investment Account

Vicom
Vicom

Singapore’s Central Provident Fund (CPF) system is effective in helping to save up for retirement.

However, the CPF Ordinary Account (OA), which can be used for housing and education, has an interest rate of just 2.5%.

As a result, savers may choose to invest their CPF OA monies through the CPF Investment Account (CPFIA) to enjoy better returns that can beat inflation.

But with the CPF OA, you will want to park your money in safe stocks that allow you to enjoy a good night’s sleep.

Here are five worry-free stocks you can include in your CPFIA portfolio that also pay out steady dividends.

VICOM Ltd (SGX: WJP)

VICOM is a leading provider of inspection and technical testing services.

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The group offers a comprehensive range of vehicle and non-vehicle inspection and testing services covering fields such as mechanical, civil engineering, biochemical, and non-destructive testing.

VICOM reported a steady set of earnings for 2023 with revenue rising 3.3% year on year to S$111.9 million.

Operating profit inched up 1.2% year on year to S$33 million while net profit improved by 5.4% year on year to S$27.6 million.

The test and inspection specialist maintained a clean balance sheet with S$55.1 million of cash and zero debt.

The group also generated a positive free cash flow of S$18.9 million for 2023, up 14.5% year on year.

A final dividend of S$0.0275 was declared, taking the full-year dividend to S$0.055.

This dividend was lower than the previous year’s S$0.0664 because of the anticipated capital expenditure for a new testing and inspection centre at Jalan Papan.

Haw Par Corporation Ltd (SGX: H02)

Haw Par is a conglomerate with four main divisions – healthcare, leisure, property, and investments.

Its healthcare division owns the famous Tiger Balm brand of salves, ointments and analgesics.

Haw Par reported a strong set of earnings for 2023 as economies fully reopened and sporting events resumed.

Revenue increased 27.4% year on year to S$232.1 million while gross profit jumped 37% year on year to S$134.9 million.

Net profit climbed 46% year on year to S$216.6 million.

Haw Par’s balance sheet has cash and cash equivalents plus investment securities of around S$760 million with just S$27.8 million of debt.

The healthcare player also generated a positive free cash flow of S$54.9 million for 2023.

Haw Par also raised its final dividend from S$0.15 to S$0.20, bringing 2023’s dividend to S$0.40, a 33% year-on-year rise from the prior year’s S$0.30.

Boustead Singapore Limited (SGX: F9D)

Boustead Singapore Limited, or BSL, is a conglomerate with four core divisions – energy engineering, real estate, geospatial technology, and healthcare.

The group reported a robust set of earnings for the first half of fiscal 2024 (1H FY2024) ending 30 September 2023.

Revenue jumped 49% year on year to S$367.9 million with gross profit climbing 42% year on year to S$105.3 million.

Net profit came in at S$26.9 million, up 19% year on year, but included exceptional and one-off items.

Excluding these, core net profit would have soared 89% year on year to S$25.8 million.

The engineering firm’s balance sheet was rock-solid with S$428.5 million of cash and investments along with just S$43.4 million of debt.

Boustead Singapore’s free cash flow more than doubled year on year to S$97.4 million.

The group also declared an interim dividend of S$0.015, unchanged from a year ago.

United Overseas Bank Ltd (SGX: U11)

United Overseas Bank, or UOB, is the smallest of Singapore’s three big banks.

The blue-chip lender reported a sparkling set of earnings for 2023 as higher interest rates boosted its total income.

2023’s net interest income increased by 16% year on year to S$9.7 billion while operating profit jumped 24% year on year to S$8.2 billion.

UOB’s net profit came in at S$5.7 billion, up 25% year on year.

The bank’s net interest margin also shot up from 1.86% in 2022 to 2.09% in 2023.

A final dividend of S$0.85 was declared, higher than the S$0.75 paid out a year ago.

For 2023, the lender’s total dividend stood at S$1.70, 26% higher than the S$1.35 paid out a year back.

Parkway Life REIT (SGX: C2PU)

The final stock you can buy and safely keep is Parkway Life REIT, a healthcare REIT with a portfolio of 63 properties including hospitals and nursing homes spread across Singapore (3), Japan (59), and Malaysia (1).

The healthcare REIT continued its stellar track record of consecutive increases in its core distribution per unit (DPU).

Revenue for 2023 rose 13.5% year on year to S$147.5 million while net property income climbed 14.1% year on year to S$139.1 million.

DPU inched up 2.7% year on year to S$0.1477, marking yet another year where Parkway Life REIT has increased its DPU.

The REIT has a gearing of just 35.6% as of 31 December 2023 with a low cost of borrowing of just 1.27%.

It is well-positioned to build strategic long-term partnerships with quality local operators to advance its strategy of acquiring more properties to grow its asset base and DPU.

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Disclosure: Royston Yang owns shares of VICOM and Boustead Singapore Limited.

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