The beginning of the year is a great time for receiving bonuses.
After a year of hard work, you can look forward to your annual wage supplement (AWS) or a decent variable bonus.
Armed with this bonanza, your next question may naturally be – where should I invest this money?
One group you can look at are the blue-chip stocks which are prized for their reliability and dividends.
These businesses not only boast a great track record but can also potentially grow larger over time, providing investors with a solid mix of capital gains and passive income.
Here are four attractive blue-chip stocks you can consider adding to your buy watchlist.
United Overseas Bank (SGX: U11)
United Overseas Bank, or UOB, is the smallest of Singapore’s trio of local banks.
The lender offers a comprehensive range of banking, investment, and insurance services to corporations and individuals.
UOB reported a robust set of earnings for the third quarter of 2023 (3Q 2023).
For the first nine months of 2023 (9M 2023), total income leapt 28% year on year to S$10.5 billion on the back of a 26% year-on-year jump in net interest income to S$7.3 billion.
The strong performance was because of the sustained rise in interest rates that lifted the bank’s net interest margin.
Net profit climbed 26% year on year to S$4.3 billion for 9M 2023, inclusive of a one-time charge of S$255 million related to UOB’s acquisition and integration of Citigroup’s (NYSE: C) consumer banking business.
Back in August, UOB had hiked its interim dividend from S$0.60 to S$0.85 in line with the growth in net profit.
There could be more growth in store for the lender.
Last November, UOB announced the completion of the integration of Citigroup’s consumer banking franchise in Indonesia, Malaysia, Thailand and Vietnam.
This move has doubled UOB’s retail customer base to eight million and accelerated its growth targets five years ahead of time.
With interest rates poised to stay higher for longer, the bank’s net interest income should also stay buoyant.
CapitaLand Ascendas REIT (SGX: A17U)
The REIT sector is another attractive source of investment ideas as REITs are mandated to pay out at least 90% of their earnings as distributions.
CapitaLand Ascendas REIT, or CLAR, is Singapore’s oldest industrial REIT with a portfolio of 230 properties worth S$17.2 billion as of 30 September 2023.
The REIT maintains a high portfolio occupancy of 94.5% while also reporting a positive rental reversion of 10.5% for its latest quarter.
CLAR sported a trailing 12-month distribution per unit (DPU) of S$0.15644, giving its units a trailing distribution yield of 5.3%.
The REIT manager continues to work on enhancing CLAR’s portfolio with the completion of a data centre acquisition in the UK for S$209.4 million in 3Q 2023.
For 9M 2023, acquisitions totalled S$724.3 million.
The industrial REIT has several ongoing projects worth S$600 million involving redevelopments in Singapore and a convert-to-suit project in the US.
Just last month, CLAR divested three properties in Australia at a premium to their valuation as part of its ongoing capital recycling strategy.
Keppel Ltd (SGX: BN4)
Keppel is a global asset manager and operates in more than 20 countries providing infrastructure and services for renewables, clean energy, and sustainable urban renewal.
The group released an encouraging 9M 2023 business update that saw revenue rise 5% year on year to S$5.3 billion.
Keppel has also raised around S$1 billion in equity in 9M 2023 and made total acquisitions amounting to close to S$1.7 billion during the same period.
The asset manager outperformed its asset monetisation target with S$5.3 billion of transactions announced since October 2020.
Keppel’s total distributions for 2023 touched ~S$2.70 per share, inclusive of its distribution-in-specie of Keppel REIT’s (SGX: K71U) units.
Keppel is pushing forward with growth with the recent acquisition of a 50% stake in European Asset manager Aermont Capital.
One of its funds, Alpha Asia Separate Account, also concluded a transaction to purchase mixed-use development Wilkie Edge earlier this month.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, is a logistics REIT with a portfolio of 189 properties spread across eight countries with an asset value of S$13.3 billion as of 30 September 2023.
The REIT managed a resilient performance for the first half of fiscal 2024 (1H FY2024) ending 30 September 2023.
Gross revenue dipped by 0.7% year on year but DPU eked out a 0.5% year-on-year increase to S$0.04539.
The logistics REIT’s trailing 12-month DPU stood at S$0.09034, giving its units a trailing distribution yield of 5.4%.
MLT sported strong operating metrics with portfolio occupancy nearly touching 97%.
The REIT also reported a positive rental reversion of 0.2% for the quarter, dragged down partially by China’s woes.
MLT remains active with acquisitions.
It just announced the purchase of a Grade A warehouse in NCR Delhi for around S$14.5 million.
This asset is fully occupied and will not only help to further diversify its portfolio but is also DPU-accretive.
Elsewhere, the REIT also has an ongoing redevelopment of 51 Benoi Road in Singapore to more than double its gross floor area.
This project should be completed by the first quarter of 2025.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
