The twin worries of high inflation and surging interest rates have cast a pall on the economic outlook.
Investors are worried that businesses may start reporting lower revenue and profits as consumer sentiment takes a hit.
During such troubled times, blue-chip stocks provide a haven that investors can rely on.
Their long track record, coupled with a strong reputation and experience in dealing with good and bad times, allow them to sail through challenging times to emerge stronger.
What’s more, most blue-chip stocks also pay out a dividend, thus providing investors with a useful stream of passive income to tide through the storm.
Here are four reliable blue-chip names sporting dividend yields of 5.5% or higher.
OCBC Ltd (SGX: O39)
OCBC Ltd is Singapore’s second-largest bank by market capitalisation.
The lender reported a strong set of earnings for the first nine months of 2023 (9M 2023).
Total income for 9M 2023 climbed 24% year on year to S$10.2 billion while net profit jumped 32% year on year to S$5.4 billion.
The bank’s net interest margin for the period also rose to 2.28%, up sharply from the 1.78% registered a year ago.
OCBC paid out a trailing 12-month dividend of S$0.80, translating into a trailing dividend yield of 6.3%.
CEO Helen Wong believes that the bank is on track for a resilient full-year performance with a net interest margin of 2.25% and a return on equity above 14%.
Loan growth is expected in the mid-single-digit region and the lender will maintain its 50% dividend payout ratio when it announces its 2023 results in February 2024.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, is an industrial REIT with a portfolio of 189 properties across eight countries with assets under management (AUM) of S$13.3 billion as of 30 September 2023.
The REIT reported a commendable set of earnings for its first half of fiscal 2024 (1H FY2024) ending 30 September 2023.
Gross revenue for 1H FY2024 dipped 0.7% year on year to S$368.9 million with net property income (NPI) slipping 1% year on year to S$320.1 million.
However, MLT’s distribution per unit (DPU) managed to eke out a small 0.5% year on year increase to S$0.04539.
The logistics REIT’s trailing 12-month DPU came in at S$0.09034, giving its units a trailing distribution yield of 5.6%.
MLT’s portfolio occupancy remained robust at 96.9% and the REIT also registered a positive rental reversion of 0.2% for the quarter.
The REIT had just completed or is completing a series of five divestments in Singapore, Malaysia, and Japan as part of its capital recycling efforts.
1H FY2024 also saw a series of acquisitions that added eight properties to its portfolio for S$904.4 million.
CapitaLand Ascendas REIT (SGX: A17U)
CapitaLand Ascendas REIT, or CLAR, is the oldest industrial REIT in Singapore with a portfolio of 230 properties and an AUM of S$17 billion as of 30 June 2023.
For the first half of 2023 (1H 2023), CLAR reported a 7.7% year on year improvement in gross revenue while NPI shot up 6.7% year on year to S$508.8 million.
DPU, however, dipped slightly by 2% year on year to S$0.07719.
CLAR’s trailing 12-month DPU stood at S$0.15644, giving its units a trailing 12-month distribution yield of 5.5%.
The industrial REIT announced a robust set of operating metrics for its third quarter of 2023 (3Q 2023).
Portfolio occupancy stayed high at 94.5% and the REIT also enjoyed a positive rental reversion of 10.2%.
With an aggregate leverage of 37.2%, CLAR can tap on debt for yield-accretive acquisitions.
The REIT also has several ongoing projects worth S$600 million involving redevelopments or convert-to-suit works to enhance the returns of the portfolio.
Frasers Logistics & Commercial Trust (SGX: BUOU)
Frasers Logistics & Commercial Trust, or FLCT, has 107 industrial and commercial properties within its portfolio.
These properties are located in Singapore, the UK, Germany, Australia and the Netherlands with an AUM of S$6.4 billion as of 30 September 2023.
For its fiscal 2023 (FY2023) ending 30 September, FLCT saw revenue fall by 6.5% year on year to S$420.8 million.
NPI declined by 9% year on year to S$311.4 million because of higher utility expenses and finance costs.
DPU dipped by 7.6% year on year to S$0.0704, giving FLCT’s units a trailing distribution yield of 6.4%.
Despite the lower DPU, FLCT registered a healthy positive rental reversion of 18.9% for its portfolio and boasted a high occupancy rate of 96%.
The REIT sports a low aggregate leverage of just 30.2% along with a cost of debt of 2.2%, giving it a debt headroom of S$2.7 billion before it hits the 50% limit.
Elsewhere, FLCT also announced the acquisition of a logistics development on a freehold airport site in the Netherlands.
This DPU-accretive purchase will be completed by 1 November 2024.
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Disclosure: Royston Yang owns shares of Frasers Logistics & Commercial Trust.
