Blue-chip stocks form the bedrock of many investors’ portfolios because of their stability and dependability.
The great news is that most of them also pay a dividend.
Hence, investors can enjoy the best of both worlds – steady capital appreciation due to underlying business growth along with a steady stream of passive income.
Here are three reliable Singapore blue-chip stocks that not only pay out dividends but also sport attractive dividend yields of 5.4% and above.
OCBC Ltd (SGX: O39)
OCBC is Singapore’s second-largest bank and provides a comprehensive range of banking, investment, and insurance services.
The lender announced a sparkling set of earnings for the first half of 2024 (1H 2024), boosted by surging interest rates.
Total income grew 7% year on year to S$7.3 billion on the back of a 3% year-on-year increase in net interest income to S$4.9 billion.
Non-interest income jumped 15% year on year to S$2.4 billion because of higher trading income and higher earnings from OCBC’s insurance arm.
Net profit increased by 9% year on year to S$3.9 billion, a record for the bank.
OCBC saw its wealth management (WM) assets under management (AUM) increase by 2% year on year to S$279 billion.
Its WM income also rose in tandem, increasing by 14% year on year to S$2.5 billion, contributed by both its banking and insurance arms.
The bank raised its interim dividend by 10% year on year from S$0.40 to S$0.44.
OCBC’s trailing 12-month dividend stood at S$0.86, giving its shares a trailing dividend yield of 5.6%.
CEO Helen Wong is confident that the bank is on track to meet its 2024 targets.
The group believes it can enjoy low single-digit loan growth for the year and also maintain its 50% dividend payout ratio.
Frasers Logistics & Commercial Trust (SGX: BUOU)
Frasers Logistics & Commercial Trust, or FLCT, is an industrial and commercial REIT with a diversified portfolio of 112 properties in five countries.
The portfolio had an AUM of S$6.9 billion as of 30 June 2024.
FLCT reported a resilient financial performance for its first half of fiscal 2024 (1H FY2024) ending 31 March 2024.
Revenue rose 3.9% year on year to S$216 million while adjusted net property income inched up 1.8% year on year to S$158.7 million.
Distribution per unit (DPU) slid 1.1% year on year to S$0.0348.
Coupled with FLCT’s 2H FY2023 DPU of S$0.0352, the REIT’s trailing 12-month DPU stood at S$0.07.
FLCT’s units provide a trailing 12-month distribution yield of 6%.
The REIT released an encouraging business update for the third quarter of fiscal 2024 (3Q FY2024) ending 30 June 2024.
Overall portfolio occupancy stood high at 95% with a long weighted average lease expiry of 4.2 years based on gross rental income (GRI).
The portfolio also enjoyed a positive rental reversion of 25.1%.
FLCT’s aggregate leverage was fairly low at just 33.2%, giving the REIT ample room to take on debt for yield-accretive acquisitions.
To reach a gearing level of 40%, the REIT needed to take on S$793 million of additional loans.
The REIT’s cost of borrowing remained low at just 2.8% for its latest quarter, and 72.6% of its loans were on fixed rates, which helped to mitigate a sharp rise in finance costs.
Venture Corporation (SGX: V03)
Venture provides technology products, services, and solutions to a wide range of clients in the life science, genomics, medical devices, communications, and computing industries, among others.
The group reported a downbeat set of earnings for 1H 2024 as the semiconductor industry remained in the doldrums.
Revenue fell by 12.5% year on year to S$1.4 billion while net profit tumbled 11.7% year on year to S$123.7 million.
The contract manufacturer generated a positive free cash flow of S$260.3 million for 1H 2024.
Venture paid out an interim dividend of S$0.25, and has kept this interim dividend constant since 2020 and throughout the pandemic.
The group’s trailing 12-month dividend was S$0.75, giving its shares a trailing dividend yield of 5.4%.
Venture is proactively pursuing several initiatives to improve its performance in 2H 2024.
These include the onboarding of new customers, the introduction of new products, and supporting its customers with geopolitical risk mitigation strategies.
Meanwhile, the group is also working to expand its capabilities in more verticals to broaden its income streams and capture more customers.
Venture believes that 2H 2024 should see a better performance than 1H 2024.
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Disclosure: Royston Yang owns shares of Frasers Logistics & Commercial Trust.