Blue-chip stocks are so-named because of their large size and long track record in weathering tough times.
Their resilience makes them suitable for investors who are looking for assurance and peace of mind.
The good news is that most blue-chip stocks also pay out a dividend which acts as a useful source of passive income.
While your CPF Ordinary Account (OA) helps you to save for retirement, it only provides a low interest rate of 2.5%.
We introduce four dependable blue-chip stocks with yields that exceed your CPF OA.
OCBC Ltd (SGX: O39)
OCBC is Singapore’s second-largest bank by market capitalisation.
The lender provides banking and investment services along with insurance services through its subsidiary Great Eastern Holdings (SGX: G07).
The group reported a solid set of earnings for the third quarter of 2024 (3Q 2024).
Total income rose 11% year on year to S$3.8 billion on the back of a 41% year-on-year jump in non-interest income to S$1.4 billion.
Operating profit below allowances grew 12% year on year to S$2.3 billion while net profit came in at S$2 billion, up 9% year on year.
OCBC’s return in equity stood high at 14.1%, above the prior year’s 14%, and its non-performing loans ratio also improved from 1% to 0.9% over the same period.
The bank pays half-yearly dividends and declared an interim dividend of S$0.44 when it released its first half of 2024 (1H 2024) results.
This dividend was 10% higher than the previous year’s S$0.40.
OCBC’s trailing 12-month dividend stood at S$0.86, giving its shares a trailing dividend yield of 5.1%.
CEO Helen Wong believes that the lender is well-positioned to meet its 2024 targets and the group will make targeted investments in technology to drive further growth through better efficiency.
Keppel Ltd (SGX: BN4)
Keppel is a global asset manager offering solutions spanning the infrastructure, real estate, and connectivity sectors.
The blue-chip group reported a strong business update for the first nine months of 2024 (9M 2024).
Recurring income grew by 14% year on year, driven by higher contributions from asset management and better operating profit.
Net profit was comparable to that of 9M 2023 excluding the effects of legacy offshore and marine assets.
Keppel’s asset monetisation strategy is gaining momentum – S$6.1 billion of assets were monetised since the programme was announced in October 2020.
Its asset management fees also saw a 68% year-on-year increase to S$299 million for 9M 2024, with strong limited partner interest in several flagship funds such as Data Centre Fund III and Education Asset Fund II.
Keppel is also on track to grow it data centre portfolio from the current 650 MW to 1.2 GW.
Like OCBC, Keppel also pays half-yearly dividends.
The asset manager’s 1H 2024 dividend came in at S$0.15 while its 2023’s final dividend was S$0.19, bringing the total 12-month trailing dividend to S$0.34.
At a share price of S$6.89, Keppel’s shares offer a trailing dividend yield of 4.9%.
Singtel (SGX: Z74)
Singtel is Singapore’s largest telecommunication company (telco) and offers a wide range of services including mobile, broadband, Pay TV, and cybersecurity along with data centres.
The telco posted a robust set of earnings for the first half of fiscal 2025 (1H FY2025) ending 30 September 2024.
Revenue remained stable year on year at S$7 billion but operating profit climbed 27% year on year to S$740 million.
The group’s underlying net profit rose 6% year on year to S$1.2 billion, and this number is used as the basis for Singtel’s dividend payouts.
The main drivers of operating profit were Optus (+58% year on year) and NCS (+40% year on year).
Singtel ended the period with a net debt position of S$9.7 billion but had a healthy interest cover ratio of 19.1 times.
The telco’s fixed rate debt also stood at 88%, helping to mitigate a rise in finance expenses.
A total interim dividend of S$0.07 was declared, comprising a core dividend of S$0.056 and a value realisation dividend (VRD) of S$0.014.
Combined with FY2024’s final dividend of S$0.098, Singtel’s trailing 12-month dividend stands at S$0.168, giving its shares a trailing dividend yield of 5.4%.
Singapore Technologies Engineering (SGX: S63)
Singapore Technologies Engineering, or STE, is a defence, technology, and engineering group that serves the aerospace, smart city, defence, and public security sectors.
The engineering giant provided an encouraging business update for 9M 2024.
Revenue for the period rose 14% year on year to S$8.3 billion, led by broad-based revenue growth across all the group’s three divisions.
A total of S$8.3 billion in contracts was snagged in 9M 2024, lifting the group’s order book to S$26.9 billion as of 30 September 2024.
Around S$2.6 billion of this order book is expected to be delivered for the remainder of this year.
An interim dividend of S$0.04 was declared for the quarter, bringing the annualised dividend to S$0.16 per share.
STE’s shares provide a trailing 12-month dividend yield of 3.5%.
Looking to create a lifelong income stream? Check out our report, ‘7 Singapore Blue-Chip Stocks That Can Pay You for Life.’ We uncover a powerful lineup of dividend-paying stocks with the reliability and growth potential you need in today’s market. Don’t miss out on these dependable picks. Download your copy now and start building a secure financial future!
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
