The Central Provident Fund (CPF) system is an effective method to build up and grow your savings for retirement.
In particular, the Ordinary Account (OA) can be used for a variety of purposes such as housing and education.
The CPF OA accrues interest at 2.5% annually, with the first S$20,000 enjoying an enhanced interest rate of 3.5%.
However, some investors may not be satisfied with this rate of return.
With the volatility roiling stock markets right now, it’s prudent to look for established blue-chip names to add to your investment portfolio.
The good news is that all blue-chip stocks pay out a dividend, and there are a select few that yields more than what your CPF OA is offering.
Here are four Singapore blue-chip stocks with attractive dividend yields that you can consider for your buy watchlist.
DBS Group (SGX: D05)
DBS is Singapore’s largest bank by market capitalisation and offers a comprehensive range of banking services to individuals and corporations.
The lender reported an impressive set of earnings for 2022 as its net profit surged to a new all-time high of S$8.2 billion.
In line with the good results, the bank declared a special dividend of S$0.50 and also raised its quarterly dividend from S$0.36 to S$0.42.
DBS’ new core annual dividend of S$1.68 means that its shares offer a prospective dividend yield of 5.1%.
There are good indications that the group can continue to perform well in the coming quarters.
CEO Piyush Gupta is confident of achieving mid-single-digit year on year loan growth for 2023 along with double-digit year on year fee income growth as China’s economy reopens.
Higher rates will support better net interest margins for the bank which will translate into higher net interest income.
Singapore Technologies Engineering (SGX: S63)
Singapore Technologies Engineering, or STE, is a technology and engineering group that serves the aerospace, smart city, defence, and public security sectors.
The group has operations spanning more than 100 countries.
For 2022, STE reported a 17.4% year on year jump in revenue to S$9 billion.
Operating profit excluding one-off items and acquisition integration expenses surged by 55% year on year to S$727 million.
Net profit excluding government support and one-off items increased by 39% year on year to S$549 million.
A total dividend of S$0.16 was declared for 2022, translating into a trailing dividend yield of 4.3% for STE’s shares.
The engineering conglomerate ended 2022 with an order book of S$23 billion, 50% higher than its pre-COVID level.
The group expects to deliver S$7.2 billion of this order book this year.
Late last month, STE was awarded a contract for the detailed design and construction of six multi-role combat vessels for the Republic of Singapore Navy.
Yangzijiang Shipbuilding (SGX: BS6)
Yangzijiang Shipbuilding, or YZJ, is one of the largest non-state-owned shipbuilding companies in China.
The group owns four shipyards in Jiangsu that can manufacture a broad range of commercial vessels such as large containerships, bulk carriers, and LNG carriers.
Revenue climbed 37% year on year to RMB 20.7 billion for 2022 while net profit rose 31% year on year to RMB 2.6 billion.
YZJ declared a final dividend of S$0.05, giving its shares a trailing dividend yield of 4.1%.
As of 23 February 2023, the shipbuilder had an outstanding order book of US$11 billion for 149 vessels.
Late last month, YZJ partnered with two firms to take up an 81% stake in 39 Robinson Road, a freehold office building in Singapore’s financial district.
This property is expected to provide stable cash flow for the group and also act as an inflation hedge.
Wilmar International (SGX: F34)
Wilmar is an integrated agribusiness group with over 500 manufacturing plants and an extensive distribution network encompassing China, India, Indonesia and 50 other regions.
2022 saw a strong performance from the group as it reported an 11.6% year on year increase in revenue to US$73.4 billion.
Wilmar’s core net profit jumped 31.3% year on year to US$2.4 billion.
In line with the robust results, the group declared a total dividend of S$0.17 for 2022, its highest on record.
Shares of the agribusiness group provided a trailing dividend yield of 4.2%.
Wilmar will continue to expand its footprint in the food and agribusiness and strengthen the integration across its various divisions.
If you’re nervous, confused, or worried about buying your first stock, then our latest beginner’s guide to investing can help. It’s easy to read yet packed with valuable insights. Download it for free today, and buy your first stock in the next few hours. Click here to get started.
Disclosure: Royston Yang owns shares of DBS Group.