Blue-chip stocks offer investors stability in a world rocked by macroeconomic troubles and geopolitical concerns.
This group of stocks enjoy a long track record of braving through different economic conditions.
During this earnings season, we looked at the crop of blue-chip stocks to filter out those that have performed well despite the challenges.
Here are four blue-chip stocks that not only managed to post higher profits but also increased their dividends at the same time.
DBS Group (SGX: D05)
DBS Group is Singapore’s largest bank by market capitalisation.
The lender reported a strong set of results to cap off an excellent 2023 as rising interest rates boosted its net interest income.
For 2023, net interest income for its commercial book division jumped 33% year on year to S$14.3 billion.
Coupled with a 9% year-on-year increase in net fee and commission income, DBS’s total income rose 22% year on year to S$20.2 billion.
Expenses only increased by 14% year on year, thereby allowing operating profit to improve by 29% year on year to S$12.1 billion.
Net profit for 2023 increased by 23% year on year to S$10.1 billion.
In line with the strong results, the bank raised its quarterly dividend to S$0.54, a 29% jump from the S$0.42 paid out a year ago.
This dividend was also S$0.06 higher than the S$0.48 that was paid out in the third quarter of 2023.
Looking ahead for this year, CEO Piyush Gupta maintained guidance for net interest margin to remain at 2023 levels.
He also expects DBS’s fee income to rise by double-digits year on year.
United Overseas Bank Ltd (SGX: U11)
United Overseas Bank Ltd, or UOB, is the smallest of Singapore’s three banks.
Like DBS Group, UOB also enjoyed a strong uplift in its net interest income from higher interest rates.
The lender reported a record net profit while raising its dividend for 2023.
For 2023, total income rose 20% year on year to S$13.9 billion on the back of a 16% year-on-year jump in net interest income to S$9.7 billion.
Operating profit climbed 24% year on year to S$8.2 billion while core net profit increased by 26% year on year to S$6.1 billion, surpassing the S$6 billion mark for the first time.
After accounting for the integration costs related to its Citigroup (NYSE: C) acquisition, UOB’s net profit rose 25% year on year to S$5.7 billion.
A final dividend of S$0.85 was declared, bringing the full-year dividend to S$1.70, up from the S$1.35 paid out in 2022.
2024’s outlook remains sanguine with low single-digit loan growth and double-digit fee growth expected.
Keppel Ltd (SGX: BN4)
Keppel Ltd is an asset manager that specialises in sustainability-related solutions for infrastructure, real estate, and connectivity.
The group reported a historically high net profit of S$4.1 billion for 2023 because of the disposal gain from the divestment of its offshore and marine (O&M) division.
2023 saw revenue inch up 5% year on year to S$7 billion, with infrastructure and connectivity segments posting a year-on-year revenue increase offset by a revenue drop in the real estate segment.
Operating profit nearly doubled year on year to S$1.1 billion.
Keppel’s core net profit (from continuing operations) increased by 6% year on year to S$885 million.
A final cash dividend of S$0.19 was proposed, taking 2023’s dividend to S$0.34, one cent higher than the S$0.33 paid out last year.
The group has increased its recurring income from S$503 million in 2022 to S$773 million in 2023.
At the same time, Keppel also grew its funds under management from S$50 billion at the end of 2022 to S$79 billion, with S$24 billion coming from the group’s acquisition of Aermont Capital last December.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The exchange operator recently reported a respectable set of earnings for the first half of fiscal 2024 (1H FY2024) ending 31 December 2023.
Revenue improved by 3.6% year on year to S$592.2 million.
Net profit excluding one-off and exceptional items increased by 6.2% year on year to S$251.4 million.
In line with the good performance, SGX upped its quarterly dividend from S$0.08 to S$0.085.
SGX’s foreign exchange platform is seeing healthy growth with a 24% year-on-year jump in futures volume and is on track to achieve an average daily volume of US$100 billion by 2025 or earlier for its over-the-counter market.
The multi-asset exchange is also expanding its security product suite and network by launching new ETFs and Singapore Depository Receipts in partnership with the Stock Exchange of Thailand.
SGX intends to achieve a mid-single-digit % increase in dividend per share in the medium term, subject to the growth in its earnings.
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Disclosure: Royston Yang owns shares of DBS Group and Singapore Exchange Limited.
