Even as economies around the world revert to normalcy, new worries have emerged.
A combination of high inflation and surging interest rates threatens to dampen consumer demand and may tip the Singapore economy into a recession either this year or next.
If you’re worried about the effects of a punishing downturn on your investment portfolio, then it’s time to hunt for stocks with characteristics that can stand them in good stead during tough times.
Such companies have attributes such as a strong competitive moat, a clean balance sheet and a rock-solid business model that allows them to continue churning out cash.
In turn, this cash can be used to pay attractive dividends to investors as they wait for the eventual recovery.
Here are four sturdy Singapore stocks that you can consider for your buy watchlist.
Haw Par Corporation Limited (SGX: H02)
Haw Par is a conglomerate with four core divisions – healthcare, leisure, property, and investments.
Its key business division is Healthcare as it generated 90.4% of the group’s revenue for the first half of 2022 (1H2022).
Haw Par’s healthcare segment is represented by the famous Tiger Balm brand, one of the world’s most versatile analgesic brands.
The group saw its revenue climb 45.1% year on year for 1H2022 to S$95.5 million as sales of healthcare products rebounded strongly with the reopening of borders.
As of 30 June, the group boasted a solid balance sheet with S$600 million of cash and just S$12.9 million of borrowings.
In addition, Haw Par held S$2.5 billion worth of strategic and long-term investments that comprise shares of United Overseas Bank Ltd (SGX: U11) and UOL Group Limited (SGX: U14).
These investments paid out total dividends of S$57.4 million to Haw Par in 1H2022, up from S$40 million a year ago.
In turn, Haw Par declared and paid out an interim dividend of S$0.15 to shareholders.
PropNex Limited (SGX: OYY)
PropNex is an integrated real estate services group with 12,065 sales professionals as of 2 November 2022.
The group reported a robust set of earnings for its fiscal 2022’s third quarter (3Q2022).
Revenue rose 10.2% year on year to S$258.4 million while net profit jumped 17.8% year on year to S$18.2 million.
The government has introduced a new set of property cooling measures from 30 September that tightens the maximum loan quantum, reduces HDB’s loan-to-value limit, and imposes a 15-month wait-out period for private homeowners buying HDB flats.
Despite these measures, PropNex’s business should remain resilient as it is one of the largest real estate agencies in Singapore.
Condominium prices have also risen by 10.8% year on year in November 2022 due to a lack of new condo launches and low stock.
Furthermore, PropNex also maintained a clean balance sheet with S$127.2 million in cash with no debt.
Back during 1H2022, the group paid out an interim dividend of S$0.055, unchanged from a year ago.
Raffles Medical Group (SGX: BSL)
Raffles Medical Group, or RMG, is an integrated healthcare provider that offers a comprehensive range of services ranging from primary and tertiary care to health insurance.
The group has seen business improving sharply as borders reopened with more patients and tourists visiting its hospitals and clinics.
For the first nine months of 2022 (9M2022), revenue rose 9.6% year on year to S$581.8 million while net profit soared 57.3% year on year to S$98.2 million.
As of 30 June, RMG’s balance sheet held S$289.1 million of cash along with S$154.3 million of borrowings.
The healthcare group’s free cash flow for 1H2022 also nearly tripled year on year from S$42.5 million to S$123.1 million.
The integrated healthcare player paid out a final dividend of S$0.018 and a special dividend of S$0.01 for FY2021.
Sheng Siong Group Ltd (SGX: OV8)
Sheng Siong is one of the largest supermarket chains in Singapore with 66 outlets located around the island, mostly in heartland areas.
The group sells a wide variety of necessities and essential household products and offers more than 1,500 products under its 23 house brands.
9M2022 saw Sheng Siong’s revenue dip by 1.9% year on year to S$1 billion due to the high-base effect from the prior year.
However, net profit remained flat year on year at S$100.4 million with an increase in the supermarket operator’s gross margin from 28.5% to 29.4%.
Sheng Siong’s balance sheet also remained rock-solid, with S$228.6 million in cash along with zero debt as of 30 September 2022.
The retailer paid out an interim dividend of S$0.0315, slightly higher than the S$0.031 it paid out a year ago.
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Disclaimer: Royston Yang owns shares of Raffles Medical Group.
