The dreaded “R” word is on almost every investor’s lips.
Yes, I am talking about an economic recession that may severely crimp demand for goods and services.
The world has been grappling with soaring inflation along with a surge in interest rates over the past year.
These troubles have spilled over into the stock market as businesses announce weaker earnings and report lower visibility on what may come.
During tough times, it is a great idea to fortify your portfolio with blue-chip stocks.
These stocks have a strong franchise and an enviable track record of weathering tough times.
What’s more, they also pay out consistent dividends that act as a stream of passive income to tide you through a downturn.
Here are three solid blue-chip names that should remain resilient that you may want to include in your buy watchlist.
DBS Group (SGX: D05)
Singapore’s largest bank needs no introduction.
The group provides a comprehensive range of banking, insurance, and investment services to individuals and corporations in Singapore and around the Asian region.
The lender recently reported a sparkling set of earnings for 2022.
Total income hit a record high of S$16.5 billion while net profit also scaled a new record of S$8.2 billion.
In line with the strong results, DBS declared a special dividend of S$0.50 while also hiking its quarterly dividend from S$0.36 to S$0.42.
As a testament to its resilience, the bank was also paying out dividends during the global financial crisis from 2008-2009.
Looking ahead, DBS looks poised to benefit from continued interest rate increases as the US Federal Reserve continues its battle against runaway inflation.
CEO Piyush Gupta also expects China’s reopening to benefit the region’s operating environment and to spur double-digit year on year fee income growth.
He believes the bank has a sufficient buffer to guard against any risks that may crop up, and also projects a mid-single-digit year on year increase in its loan book.
Singapore Technologies Engineering (SGX: S63)
Singapore Technologies Engineering, or STE, is a global technology and engineering group serving the aerospace, smart city, and public security segments.
STE serves customers in more than 100 countries.
The engineering giant reported a respectable set of earnings for 2022, with revenue climbing 17.4% year on year to S$9 billion.
Operating profit excluding one-off acquisition integration expenses and government grants surged 55% year on year to S$729 million.
Adjusted net profit jumped 39% year on year to S$551 million.
A total dividend of S$0.16 per share was declared for 2022, slightly higher than the S$0.15 paid out in 2021.
An impressive S$13.1 billion of new contracts were secured last year that involved all three of STE’s major divisions.
As a result, STE’s order book stood at S$23 billion at the end of 2022, 31% higher than the S$17.5 billion at the end of the previous year.
Note that this level of order book excludes the Marine division’s orders as this division was divested in November last year.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The group has been a steady dividend payer since its fiscal 2021 (FY2021) ending 30 June 2021.
Back then, SGX paid out an annual dividend of S$0.055 but this has since risen to S$0.32 for FY2022.
The bourse operator reported an encouraging set of financial numbers for its fiscal 2023’s first half (1H FY2023).
Revenue rose 10% year on year to S$571 million while net profit surged by 30% year on year to S$285 million.
SGX paid out a dividend of S$0.16 for 1H FY2023.
The group’s multi-asset platform continues to attract clients who seek a wide range of risk management tools.
Daily average volume (DAV) across equities, foreign exchange (FX), and commodities saw year on year increases for the half year.
In particular, SGX’s iron ore product suite saw its DAV jump from 78,000 in 1H FY2021 to 131,000 in 1H FY2023, a record for iron ore volumes in the bourse operator’s history.
Its FX platform is also doing well, with an average daily volume of US$68 billion for 1H FY2023, contributing 6% of total revenue.
This division remains on track to achieve an average daily volume of US$100 billion in the medium term.
Want to know what to expect in the stock market in 2023? Which were the best performing stocks and blue chips in the Singapore market in 2022? Be prepared for 2023 with our special FREE report. Click HERE to download “Year in Review 2022”
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Disclosure: Joanna Sng owns all the stocks mentioned.
