If you are starting out in investing, congratulations!
You have taken a significant step in growing your wealth and achieving a stream of passive income.
It can feel daunting when you are approaching a new activity for the first time.
You may prefer to pursue growth or income investing, or perhaps settle for a balance of both.
Luckily, many Singapore-listed stocks offer a sweet combination of the two.
New investors will normally gravitate towards larger, blue-chip names for their first investments.
These companies have a long track record of performance and have been through multiple crises.
Once you have established your starter portfolio, you can then move on to looking at other types of companies.
Here are three blue-chip stocks that are perfect for kick-starting your investment journey.
DBS Group Holdings Ltd (SGX: D05)
DBS probably needs no introduction, being Singapore’s bellwether local bank.
The group is the largest of the three local banks here and offers a comprehensive range of banking and investment services for individuals and corporations.
The lender has weathered the COVID-19 pandemic admirably and demonstrated its resilience in the face of tough macroeconomic challenges.
For its fiscal year 2020 (FY2020) earnings, DBS reported a good set of numbers despite the crisis.
Total revenue remained flat year on year at S$14.6 billion while profit before allowances inched up 2% year on year to S$8.4 billion.
Provisions for bad loans were increased more than four-fold in anticipation of some borrowers facing difficulties in servicing their debts.
As a result, net profit declined by 26% year on year to S$4.7 billion.
The group declared an interim dividend of S$0.18 per share, bringing the full-year dividend to S$0.87.
For context, 2020’s dividend was lower than the S$1.23 declared in 2019 as the Monetary Authority of Singapore had called on banks to moderate their dividend payments in light of the pandemic.
CEO Piyush Gupta observed that the latest economic data points to a strong economic rebound this year.
The bank has fortified its balance sheet and recognised provisions above regulatory requirements for prudence’s sake.
CapitaLand Integrated Commercial Trust (SGX: C38U)
If you’re looking for a strong, stable REIT to invest in, CapitaLand Integrated Commercial Trust, or CICT, could be worth a look.
The S$14.3 billion REIT is the result of the merger between CapitaLand Mall Trust (CMT) and CapitaLand Commercial Trust (CCT) in October last year.
CMT was listed in July 2002 while CCT went public in May 2004, demonstrating their long operating track record.
CICT’s portfolio consists of 22 properties in Singapore and two in Frankfurt, Germany, with a property value of S$22.3 billion as of 31 December 2020.
The REIT, managed by real estate giant CapitaLand Limited (SGX: C31), reported that gross revenue dipped from S$786.7 million in 2019 to S$745.2 million last year.
Net property income declined by 8.1% year on year to S$512.7 million, mainly due to the impact of COVID-19 on the REIT’s mall portfolio.
Distributable income fell by 16.4% year on year as tenant reliefs were handed out to support tenants through this difficult period.
As a result, distribution per unit (DPU) declined by 27.4% to S$0.0869.
Despite the weaker results, portfolio occupancy remained high at 96.4% as of end-2020.
Shopper traffic in the last week of December 2020 has also recovered to over 75% of the level recorded in the first week of January 2020.
Venture Corporation Ltd (SGX: V03)
Venture is a leading provider of technology solutions, products and services.
The group employs over 12,000 people worldwide and manages a portfolio of more than 5,000 products.
If you’re looking for a reputable company to ride on the current electronics wave, then Venture is a great fit.
The group reported a 17.1% year on year dip in revenue last year while net profit fell by 18.2% year on year, mainly due to disruptions in supply chains in the early part of 2020 when the pandemic first broke out.
However, revenue and net profit have increased in the second half of the year compared to the first half.
Management remains confident of its prospects and has increased the full-year dividend to S$0.75 from S$0.70 last year.
Venture intends to increase its business development efforts in the robotics, automation and artificial intelligence sectors as these are growing industries.
The group also has plans to capture business in the battery electric vehicle industry as governments around the world are promoting cleaner fuels.
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Disclaimer: Royston Yang owns shares of DBS Group Holdings Ltd.