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Worried About Another Market Crash? Here are 3 Stocks I Plan to Buy During the Next One

·4-min read
Man Looking Worried
Man Looking Worried

Stock markets in Singapore have been buoyed by good news as the economy undergoes a recovery.

The local banks have led the benchmark Straits Times Index (SGX: ^STI) higher since the start of the year in anticipation of higher interest rates.

In the US, however, the technology-heavy NASDAQ Composite Index has taken a sharp 9.7% tumble from its all-time high as growth concerns mount.

It can be tough to anticipate when the next market crash will come along.

But even though you cannot predict, you can certainly prepare.

Maintaining a portfolio of resilient stocks is one way.

Another good idea is to single out specific stocks that you’d want to buy when the market does crash.

By being ready, you can automatically execute your orders should the market suddenly dive.

Here are three stocks that I plan to buy when the next market crash comes around.

Frasers Logistics & Commercial Trust (SGX: BUOU)

Frasers Logistics & Commercial Trust, or FLCT, is a REIT that owns 103 properties across Singapore, Australia, Germany, the UK and the Netherlands.

FLCT’s portfolio is valued at S$7.3 billion as of 30 September, with the occupancy rate standing high at 96.2%.

The REIT has demonstrated its resilience in the last two years as it successfully navigated the pandemic while maintaining high occupancy.

It also has a strong sponsor in Frasers Property Limited (SGX: TQ5), an owner and developer of real estate with total assets of around S$39.2 billion as of 31 March 2021.

For its fiscal 2021 ended 30 September 2021 (FY2021), FLCT reported a 41.4% year on year jump in revenue to S$469.3 million.

Adjusted net property income (NPI) rose by 37.5% year on year while distribution per unit (DPU) increased by 7.9% year on year to S$0.0768.

At a unit price of S$1.46, the REIT offers a historical distribution yield of 5.3%.

FLCT’s aggregate leverage stands at 33.7%, and the REIT has a debt headroom of nearly S$2.5 billion for further acquisitions to boost DPU.

The REIT’s cost of borrowing remains low at 1.6% while the interest coverage ratio is healthy at 7.3 times.

United Overseas Bank Ltd (SGX: U11)

United Overseas Bank Ltd, or UOB, is one of Singapore’s three big local banks.

The bank has reported an impressive set of financial numbers in the first nine months of this year (9M2021).

Not only did the lender chalk up a record-high fee income of S$1.8 billion, but it also reported a 9% year on year increase in its loan book.

UOB has also been generous in rewarding shareholders.

Its recent interim dividend of S$0.60 per share was even higher than the pre-pandemic level of S$0.55.

Recently, the bank announced that it had acquired Citigroup’s (NYSE: C) consumer banking business in four countries — Malaysia, Thailand, Indonesia, and Vietnam, for nearly S$5 billion.

This purchase is poised to accelerate its customer growth in these four countries while also adding to the bank’s total income.

Singapore Exchange Limited (SGX: S68)

Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.

The bourse operator enjoys a natural monopoly and has been paying out consistent quarterly dividends.

For its fiscal year 2021 ended 30 June 2021, SGX reported revenue of S$1 billion, comparable to the year before.

Net profit dipped by 6% year on year mainly due to expenses incurred for two acquisitions the group made during the fiscal year.

The bourse operator paid out a final dividend of S$0.08, bringing the FY2021 dividend to S$0.32.

At S$9.54, SGX’s shares offer a historical dividend yield of 3.4%.

The group has laid out a clear path for growth during its Analyst Day last year and plans to focus on exchange-traded funds (ETFs) and foreign exchange opportunities.

Special purpose acquisition companies, or SPACs, are also set to liven up the stock market.

The first two are set to be listed this week and may inject the buzz that SGX needs for higher trading volumes.

Meanwhile, the group’s recent market statistics for December point to higher demand for equity and commodity derivatives.

Combined assets under management for ETFs also jumped 47% year on year to S$12.6 billion as of end-December.

Looking for investment opportunities in 2022 and beyond? In our latest special FREE report “Top 9 Dividend Stocks for 2022”, we’re revealing 3 groups of stocks that are set to deliver mouth-watering dividends in the coming year.

Our safe-harbour stocks are a set of blue-chip companies that have been able to hold their own and deliver steady dividends. Growth accelerators stocks are enterprising businesses poised to continue their growth. And finally, the pandemic surprises are the unexpected winners of the pandemic.

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Disclaimer: Royston Yang owns shares of Frasers Logistics & Commercial Trust and Singapore Exchange Limited.

The post Worried About Another Market Crash? Here are 3 Stocks I Plan to Buy During the Next One appeared first on The Smart Investor.

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