“Buy and hold” is a common investing mantra but it’s important to be selective on which stocks qualify.
Ideally, you should look for companies with strong franchises, a competitive moat, and a track record of doing well through good times and bad.
It also helps if these stocks pay out a dividend that can act as a stream of passive income.
Blue-chip companies can qualify, along with businesses that generate healthy free cash flow and have strong branding and a dominant market share.
Here are four Singapore stocks that I believe you can buy and hold for the rest of your life.
VICOM Limited (SGX: WJP)
VICOM is a leading provider of inspection and technical testing services.
The group is a subsidiary of ComfortDelGro Corporation Limited (SGX: C52) and provides both vehicular and non-vehicular testing and inspection services.
VICOM has a market share of close to 75% in the vehicle inspection market and the group inspected a record 523,639 vehicles in fiscal 2021 (FY2021).
The inspection specialist also has a long track record of generating free cash flow and also maintains a debt-free balance sheet.
For the first quarter of 2022 (1Q2022), VICOM’s business update saw revenue rise by 8.1% year on year to S$26 million.
Operating profit edged up 5.7% year on year while net profit inched up 3% year on year to S$6.3 million.
VICOM has also been a consistent payer of dividends.
It paid out a final dividend of S$0.0324 and a special dividend of S$0.02 for FY2021.
Together with FY2021’s interim dividend of S$0.0304, the total dividend for FY2021 came up to S$0.0828, giving its shares a trailing dividend yield of 4.1%.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The group enjoys a natural monopoly and has a long track record of paying out dividends since 2001.
The bourse operator offers a comprehensive range of securities such as shares, bonds, and derivatives for its clients to buy and sell and hedge their investment portfolios.
SGX has several catalysts in place to help it grow its securities trading volume.
First off, the group listed three special purpose acquisition companies, or SPACs, earlier this year.
Next, it welcomed secondary listings of electric car maker Nio Inc (SGX: NIO) and liquor company Emperador (SGX: EMI) to boost investor interest.
And more recently, it collaborated with the New York Stock Exchange to explore the dual listing of companies and also launched the NSE IFSC-SGX Connect to allow the trading and clearing of Nifty equity derivatives for global institutions.
DBS Group (SGX: D05)
DBS needs no introduction, being Singapore’s largest bank.
The lender recently announced that net profit for the first half of 2022 (1H2022) came in at S$3.6 billion, just 3% short of its record-high last year.
However, the bank upped its interim quarterly dividend from S$0.33 last year to S$0.36, and its shares provide a forward dividend yield of 4.3%.
DBS has demonstrated its resilience throughout the pandemic as a rise in fee income compensated for lower net interest income.
Looking ahead, the bank will benefit from the sharp hikes in interest rates as the US Federal Reserve attempts to bring down inflation.
Investors in the financial institution can also look forward to the integration of its recent acquisition of Citigroup’s (NYSE: C) Taiwan consumer division and new income streams coming from the launch of a digital exchange.
Raffles Medical Group (SGX: BSL)
Raffles Medical Group, or RMG, is an integrated healthcare provider that provides a comprehensive range of healthcare services.
RMG’s network comprises three tertiary hospitals and more than 100 multi-disciplinary clinics that offer services such as health screening, specialist care, and diagnostics.
The group reported a healthy set of results for 1H2022, with revenue up 11.2% year on year to S$382.3 million.
Operating profit surged 54.1% year on year to S$86.4 million as patients streamed back to its clinics.
Net profit jumped 51.3% year on year to S$59.7 million.
RMG continues to support the Singapore government with testing and vaccination services for COVID-19.
The group is cautiously optimistic that travel restrictions will ease in China, allowing normal business activities to resume.
RMG has also obtained approval to set up an in-vitro fertilisation and assisted reproduction therapy centre in Hainan, China, to serve around 40 million women there.
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Disclaimer: Royston Yang owns shares of VICOM, Singapore Exchange Limited, DBS Group and Raffles Medical Group.
