It’s the Holy Grail of investing to own a stock over decades and hand it down to your children.
But this is not a fantasy.
Blue-chip stocks can provide you with the stability and assurance that they will be around for many more decades.
What’s more, these stocks can also continue growing and churning out dividends, thereby providing you with a source of passive income for life.
Having these companies in your portfolio also sets you up better for retirement as you can tap on the dividends for cash flow during your golden years.
Here are three Singapore blue-chip stocks that you can own for the rest of your life.
CapitaLand Investment Limited (SGX: 9CI)
CapitaLand Investment Limited, or CLI, is a spin-off from the old CapitaLand Limited.
In the middle of last year, CapitaLand Limited moved to privatise its development arm under Temasek Holdings while listing its investment arm under CLI.
CLI is a global real estate investment manager with S$124 billion of assets under management (AUM) and around S$86 billion of funds under management (FUM) as of 31 March 2022.
The group reported a sparkling set of earnings for fiscal 2021 (FY2021), chalking up a net profit of S$1.35 billion, a sharp reversal from the net loss of S$559 million in FY2020.
CLI also declared total final and special dividends amounting to S$0.15 per share, translating to a trailing dividend yield of 4%.
The group has been active in building up its AUM and announced the acquisition of a 22-storey office tower in Melbourne, Australia earlier this month.
This acquisition is for its regional core-plus fund, CapitaLand Open End Real Estate Fund (COREF), and total investment in COREF has hit around US$900 million since it was established close to a year ago.
Elsewhere, the real estate giant also established its first onshore RMB fund in China to advance its asset-light strategy to grow its FUM.
The fund was set up through a partnership with a domestic asset management firm and CLI holds a 12% stake in the RMB 700 million fund.
Just this week, its lodging unit Ascott Limited announced the acquisition of Oakwood Worldwide from Mapletree Investments Pte Ltd, increasing the former’s global portfolio by 81 properties and around 15,000 units.
Post-acquisition, Ascott will own more than 150,000 units in about 900 properties across 200 cities in nine countries.
Mapletree Industrial Trust (SGX: ME8U)
Moving on to the REITs space, you can count on Mapletree Industrial Trust, or MIT, to deliver steady and sustainable distributions.
The industrial REIT owns a portfolio of 143 properties valued at S$8.8 billion as of 31 March 2022.
Around 54% of MIT’s AUM is in data centres while the remainder is spread across flatted factories, Hi-Tech buildings, and business parks.
The REIT has a stellar distribution per unit (DPU) track record, displaying an unbroken increase in DPU since fiscal 2011/2012 (FY2011/2012).
DPU increased from S$0.0841 back then to S$0.138 in FY2021/2022.
MIT’s trailing distribution yield stood at 5.3%.
Not only does MIT possess a strong sponsor in Mapletree Investment Pte Ltd, but its portfolio also enjoys a high occupancy rate of 94%.
The REIT has a diversified tenant base of over 2,000 tenants where the largest tenant only contributes 6.1% of gross rental income.
Aggregate leverage stood at 38.4% with a low cost of debt of 2.4%, allowing the REIT sufficient debt headroom for more acquisitions.
OCBC Ltd (SGX: O39)
OCBC is one of Singapore’s three big banks and offers a comprehensive range of banking services to both corporations and individuals.
The lender reported a robust set of earnings for its 2022’s first quarter (1Q2022), with a net profit of S$1.36 billion, 39% higher year on year.
OCBC also recently restored its dividend to pre-pandemic levels, paying out a total of S$0.53 per share for fiscal 2021 (FY2021).
The trailing dividend yield stands at 4.7% for the bank.
The group is set to enjoy the tailwind of higher interest rates as the Federal Reserve recently announced its largest rate hike in almost 30 years.
The 0.75 percentage point increase portends more rate increases to come as the US battles four-decade-high inflation.
OCBC’s resilience and track record through different business cycles make it a strong contender for any investor’s portfolio.
Making the right move during a recession could deliver sky-high returns for your portfolio. It might even be more than what you could make during a bull market. That’s why in our upcoming webinar, we’ll dive deep into the topic “How to make money during a recession”. Join us and discover what you must do in a downturn to pull in more returns than the average investor. Reserve a FREE seat here.
Follow us on Facebook and Telegram for the latest investing news and analyses!
Disclaimer: Royston Yang owns shares of Mapletree Industrial Trust.
