Blue-chip stocks are a great source of investment ideas for new investors.
These stocks are so named because they represent strong and stable businesses with long track records.
The Straits Times Index (SGX: ^STI), or STI, contains 30 of the largest blue-chip stocks on the Singapore stock exchange.
As of 15 June 2022, the index has chalked up a slight negative return of -0.57%.
If you dug deeper into the component stocks within the benchmark index, you’d see that some had performed significantly better while others did worse.
Here are three blue-chip stocks that beat the STI by a wide margin and could have more room to run.
Sembcorp Industries Ltd (SGX: U96)
Sembcorp Industries Ltd, or SCI, is a leading energy and urban solutions provider.
The group has an energy portfolio of 16.5 gigawatts (GW), of which 7.0 GW comprises renewable energy such as solar and wind energies.
Shares of the energy group have surged by 39.3% year to date, handily beating the STI.
SCI had reported a stellar set of earnings for fiscal 2021 (FY2021), with revenue jumping 43% year on year to S$7.8 billion and net profit surging by 78% year on year to S$279 million.
For FY2021, the group secured 2.9 GW of new renewable energy projects across its key markets.
SCI recently announced the completion of the acquisition of a 98% interest in a portfolio of operational wind and solar assets in China.
The group is on track to achieve its target of 10 GW of installed renewables capacity by 2025, as part of its three-prong business transformation announced in mid-June last year.
Meanwhile, SCI has also been appointed by the Energy Market Authority to build, own and operate energy storage systems on Jurong Island.
Keppel Corporation Limited (SGX: BN4)
Keppel Corporation is a sustainable urbanisation solutions provider with four key divisions – energy and environment, urban development, connectivity, and asset management.
The group’s share price has done well year to date, chalking up a return of 29.2% before factoring in dividends.
Keppel had announced its highest net profit in six years of S$1.02 billion for FY2021, reversing the loss of S$506 million a year ago.
A total dividend of S$0.33 per share was also paid out and a S$500 million share buyback programme was initiated.
The conglomerate continues to make good progress on its Vision 2030 goals as it reported good progress for its asset monetisation.
Over S$3.2 billion was monetised from October 2020 till end-March 2022, with S$17.5 billion worth of monetisable assets across the group.
Keppel Corporation also grew its recurring income by 33% year on year for FY2021 from S$220 million to S$292 million.
The momentum has carried into the first quarter of 2022 (1Q2022), with revenue rising by 9% year on year to S$2.1 billion.
Investors can also look forward to the upcoming merger between Keppel’s Offshore and Marine (O&M) division and Sembcorp Marine Ltd (SGX: S51) which will create a stronger global player in the O&M sector.
City Developments Limited (SGX: C09)
City Developments Limited, or CDL, is a global real estate company that operates in 104 locations in 29 countries and regions.
The group owns and manages a portfolio of residential, hotel, and investment properties across the world.
CDL’s share price has outperformed the STI with a 17.3% rise year to date.
The property giant reported an improved set of earnings for FY2021, with revenue climbing 24.5% year on year to S$2.63 billion.
The better performance came after the group offloaded its 51% stake in troubled Sincere China for US$1 last September.
It also paid out a total dividend of S$0.12 per share for FY2021.
For 1Q2022’s business update, CDL reported that market activity in Singapore is set to improve with more new launches coming.
Construction activities are also resuming with the country’s reopening as labour woes are now easing.
CDL’s hotel operations are also seeing signs of improvement with room occupancy rising to 52.2% in 1Q2022 from 36.8% a year ago.
Revenue per available room (RevPAR) has also more than doubled from S$44.4 in 1Q2021 to S$89.6 in 1Q2022.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
Editor’s note [20 June 2022, 2:00 pm]: We have updated Sembcorp Industries’ GW figures for its overall energy portfolio and renewables portfolio after being contacted by the IR.
