Given the challenging macroeconomic backdrop thus far, with the war in the Middle East showing little signs of abating, you’ll be surprised to learn that there are a few blue-chip stocks up double digits in 2026.
With the strong rallies experienced, is the upside gone for these stocks?
Let’s dig deeper and find out.
Why Some Blue Chips Are Rallying in 2026
Strong rallies can happen for many reasons, including strong earnings, improved industrial outlook, or even sector rotations conducted by investors.
However, investors should ask if these rallies are likely to hold.
Strong earnings or an improved industrial outlook are based on underlying fundamentals and typically hold up better than rallies caused by sector rotations.
It is also important to check if current valuations are significantly above the historical average.
Finally, has the current price accounted for all the catalysts, with nothing on the horizon?
Yangzijiang Shipbuilding (Holdings) Ltd (SGX: BS6) — The Earnings Growth Story
This shipbuilding powerhouse has been surfing on a wave of margin expansion and higher profits over the last five years, on the back of increased pricing power and lower material costs.
For context, the net margin for Yangzijiang Shipbuilding, or YZJ, expanded from 12.6% in FY2022 to a staggering 30.3% in FY2025, with net profit surging from RMB 2.6 billion to RMB 8.6 billion.
YZJ’s rising earnings have closely tracked its share price appreciation over the years, suggesting the multi-year rally is justified by the company’s higher earnings.
The key question is: Can the company’s earnings continue growing?
With US$22.4 billion (RMB 154 billion) in order backlog, YZJ has decent visibility for its future revenue and earnings.
For investors, monitoring the orders secured by this shipbuilder is a must to gauge future earnings sustainability.
UOL Group Ltd (SGX: U14) — The Dividend Re-Rating Story
UOL enjoyed a bumper year in its full year 2025 (FY2025), with contributions from its residential, commercial, and hospitality segments.
It even paid a special dividend of S$0.07 per share for the year.
Alongside an ordinary dividend of S$0.18 per share, UOL currently offers a trailing dividend yield of 2.43%.
lthough UOL’s yield looks modest, its ordinary dividend has increased gradually from S$0.15 per share in 2020 to the aforementioned S$0.18.
With a decent payout ratio of only 45%, there is plenty of room for UOL’s dividends to continue climbing for patient shareholders.
However, should the risk of inflation pick up (because of the ongoing conflict in the Middle East), higher interest rates could hinder this property giant.
Wilmar International Limited (SGX: F34) — The Structural Growth Leader
Finally, Wilmar is a prime beneficiary of higher commodity prices.
With higher prices seen in sugar and palm oil in 2026, Wilmar’s core segments of Plantation and Sugar Milling, alongside Feed and Industrial Products, stand to benefit from the Middle Eastern war.
Together, these segments make up 60% of Wilmar’s FY2025 profit before tax.
The company’s competitive advantage is being a fully vertically integrated player where it controls the inputs (commodities) of its products (consumer food brands).
This said, its food products division could suffer because of higher costs, which could result in lower demand.
However, over the long term, the food products division could serve as a structural growth trend for Wilmar as more consumers switch to the company’s brand of products.
This can already be seen in the group’s strong leading positions in various markets.
Navigating Significant Gains
Chasing stocks that have delivered year-to-date double-digit returns requires a cautious approach.
It often makes sense to stay away if the rally is driven by wildly stretched valuations or price increases that lack a foundation in strong business fundamentals.
Similarly, a contraction in earnings during a price surge is a significant warning sign.
So, what’s the game plan here if you would like to start positions in these companies?
As always, discipline is essential.
Instead of committing all your capital at elevated prices, consider accumulating shares gradually.
Over the long run, the underlying strength of the business remains the most important factor in any investment journey.
Get Smart: Price Is What You Pay, Value Is What You Get
Just because a stock has rallied hard does not mean it is a poor investment.
The crème de la crème blue chips have the capacity to continue compounding over long periods, provided the business remains healthy.
The key is to look past recent price movements and evaluate whether the company can continue to execute its strategy effectively.
Ultimately, the price you pay is only one part of the equation; the value you receive through consistent business performance is what drives long-term success.
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Disclosure: Wilson H. does not own shares in any of the companies mentioned.
