Investors prefer blue-chip stocks for a good reason.
These companies are aptly named because they have a strong growth track record and have built up a great reputation.
And when these stocks also pay out a dividend, it’s the icing on the cake.
With the earnings season just over, we compiled a list of four dividend-paying blue-chip companies that posted higher year on year net profits.
This list could be a good starting point for a beginner investor to build his or her investment portfolio.
Singapore Technologies Engineering Ltd (SGX: S63)
Singapore Technologies Engineering Ltd, or STE, is a global technology, defence and engineering group with businesses that span the aerospace, smart city, and public security sectors.
The group serves customers in more than 100 countries.
For its fiscal 2021 (FY2021) earnings, STE reported a 7.5% year on year increase in revenue.
Operating profit climbed 13% year on year to S$673.6 million while net profit improved by 9.3% year on year to S$570.5 million.
A final dividend of S$0.10 per share was declared, bringing the FY2021 dividend to S$0.15, unchanged from a year ago.
The group boasts a robust order book of S$19.3 billion as of end-2021, higher than the pre-COVID level of S$15.3 billion at end-2019.
Of this, around S$6.6 billion is expected to be delivered this year.
Moving forward, STE intends to declare quarterly dividends, and for FY2022, the group intends to pay out S$0.04 per quarter, totalling S$0.16 for the year.
At the share price of S$3.82, shares offer a forward dividend yield of 4.2%.
Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6)
Yangzijiang Shipbuilding, or YZJ, is one of the largest private shipbuilding companies in China.
The group has five shipyards and produces a broad range of commercial vessels such as containerships, bulk carriers and LNG carriers.
For FY2021, the shipbuilder reported a 13% year on year increase in revenue to RMB 16.8 billion.
Net profit jumped by 47% year on year to RMB 3.7 billion and stood at the highest level for the group in a decade.
In line with the strong performance, YZJ declared a final dividend of S$0.05, higher than the previous year’s S$0.045 dividend.
In addition, the group is also proposing to spin-off its investment arm through a separate listing on the Singapore stock exchange, and shareholders of YZJ will receive a dividend-in-specie on a one-for-one basis once approved.
YZJ’s order book stood at US$8.5 billion as of 31 December 2021 for a total of 157 vessels and is the group’s highest level of orders since FY2015.
At a share price of S$1.38, shares of the shipbuilder offer a trailing dividend yield of 3.6%.
Wilmar International Limited (SGX: F34)
Wilmar is a leading agribusiness group with an integrated supply chain that encompasses cultivation and milling to processing, branding, and distribution.
The group has more than 500 manufacturing plants and an extensive distribution network.
Wilmar reported a 30.2% year on year jump in revenue to US$65.8 billion.
Net profit hit a record and was up 24% year on year to S$1.84 billion.
A final dividend of S$0.105 was proposed and together with the S$0.05 interim dividend, the FY2021 dividend came up to S$0.155, the highest level of dividends ever paid out by the group since its IPO.
At Wilmar’s last traded share price of S$4.38, its shares provided a historical dividend yield of 3.5%.
CEO Kuok Khoon Hong expects the sales volume of the group’s food products segment to grow as it expands its manufacturing plants and central kitchens in China.
However, soybean crushing margins may be affected by high soybean prices and poor hog farming margins in China.
Venture Corporation Ltd (SGX: V03)
Venture Corporation is a provider of technology products, services and solutions.
The group manages a portfolio of more than 5,000 products and employs over 12,000 people worldwide.
Revenue for FY2021 inched up 3.1% year on year to S$3.1 billion while net profit increased by 5% year on year to S$312.1 million.
A final dividend of S$0.50 was proposed, bringing the FY2021 dividend to S$0.75.
At a share price of S$17.53, Venture’s shares offer a trailing dividend yield of 4.3%.
The group expects the robust demand for its products to continue into FY2022 in domains such as life sciences, test and measurement, and networking and communications.
Venture is gearing up for its next phase of expansion by investing in new technological capabilities while also hiring more staff.
The group did warn that ongoing supply chain disruptions may hurt its results if parts availability is disrupted, but remains positive on its long-term growth trajectory.
Get Smart: Your own passive income portfolio
As you can see, each blue chip company comes with a different growth and risk profile.
Our job, as investors, is to put together a coherent portfolio that marries stability and growth.
That’s what we do at The Smart Dividend Portfolio.
We invite you to think of what you want to achieve, and shape a portfolio that suits your needs, as we do.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
