All over the world, more people have been embracing the “FIRE” movement.
FIRE stands for “Financial Independence, Retire Early” and encourages financial independence at a much earlier age than the traditional retirement age.
Another feature of FIRE is for adherents to live frugally to save more while leading a low-maintenance lifestyle.
If you’re looking to attain FIRE, saving more may not be sufficient to get you to the finishing line.
With core inflation running at a decade-high of 2.9% in March, your cash will inexorably lose its value over time.
Here’s where investing comes into the picture.
By parking your money in well-run companies that demonstrate growth and pay out dividends, you can accelerate your journey towards FIRE.
Here are four stocks that can help you achieve that goal more quickly.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The blue-chip bourse operator has a long track record of paying out quarterly dividends and enjoys a natural monopoly.
The group reported flat year on year revenue for its fiscal 2022’s first half (1H2022) ended 31 December 2021.
Net profit dipped by 9% year on year to S$219 million due to higher expenses incurred from acquisitions related to Scientific Beta and BidFX along with higher staff costs.
Despite the weaker results, SGX declared and paid out an interim dividend of S$0.08 per share.
The trailing 12-month dividend stood at S$0.32, giving its shares a trailing dividend yield of 3.3%.
SGX recently reported record trading volume for its derivatives market in April amid macroeconomic uncertainties due to supply chain disruptions and the Russia-Ukraine war.
iFAST Corporation Limited (SGX: AIY)
iFAST is a financial technology company that runs a platform for the buying and selling of investment products such as unit trusts, equities, and bonds.
From 2017 to 2021, the group more than doubled its revenue from S$101.2 million to S$216.2 million.
Net profit nearly quadrupled over the same period from S$7.7 million to S$30.6 million.
The dividend per share rose from S$0.0301 to S$0.048.
Volatile global stock market conditions caused iFAST’s net profit for its fiscal 2022’s first quarter (1Q2022) to decline by 34.9% year on year.
However, the group is steadfast in executing its Four-Year Plan to become “bigger and better” and build a global business model.
iFAST has a target of achieving S$100 billion in assets under administration (AUA) by 2028 (AUA currently stands at S$18.63 billion as of 31 March 2022) and has acquired a UK digital bank earlier this year to help it accelerate its vision.
Microsoft Corporation (NASDAQ: MSFT)
Microsoft needs no introduction as it is one of the world’s largest software companies.
The technology giant has weathered the pandemic well, reporting a 17.5% year on year increase in revenue for its fiscal 2021 (FY2021) ended 30 June 2021.
Net profit for FY2021 jumped 38.4% year on year to US$61.3 billion.
The momentum has carried forward into the current fiscal year.
Microsoft reported a strong set of earnings for the first nine months of FY2022 (9M2022) ended 31 March 2022.
Revenue rose 20.1% year on year to US$146.4 billion while net profit climbed 25% year on year to US$56 billion.
Free cash flow remained healthy at US$47.4 billion for 9M2022.
Of note, its Azure and cloud services revenue surged by 46% year on year for the third quarter of FY2022, while revenue from business networking site LinkedIn grew 34% year on year in the same period.
Micro-Mechanics (Holdings) Ltd (SGX: 5DD)
Micro-Mechanics (Holdings) Ltd, or MMH, designs, manufactures and sells high-precision tools and parts used in the manufacturing processes for the semiconductor industry.
The group has been a consistent payer of dividends since 2003 and has steadily increased its annual dividend per share from S$0.03 in fiscal 2012 (FY2012) to S$0.14 in FY2021.
For its fiscal 2022’s first half ended 31 December 2021, MMH paid out an interim dividend of S$0.06, unchanged from a year ago.
MMH continues to enjoy tailwinds from the surge in demand for electronic devices and the internet.
For 9M2022, the group reported a 10.8% year on year increase in revenue to S$60.5 million.
Operating profit rose 10% year on year to S$18.7 million while net profit edged up 5% year on year to S$13.9 million.
The Semiconductor Industry Association has reported strong global semiconductor sales for both January and February, while the World Semiconductor Trade Statistics (WSTS) has projected that the worldwide semiconductor market will increase by 10.4% year on year to US$613.5 billion in 2022.
These trends bode well for MMH as it rides on these catalysts to generate higher sales and profits.
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Disclaimer: Royston Yang owns shares of Singapore Exchange Limited, iFAST Corporation Limited and Micro-Mechanics (Holdings) Ltd.
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