The first paycheck is an exciting moment to reminisce about.
Aside from the favourite things you would like to splurge on, or expenses that need to be paid, most people do not have a definitive idea of what stocks to consider buying.
For those that are looking for investment ideas to kickstart your investment journey, this piece is for you as well.
As a general rule of thumb, we are going to use a local university graduate’s starting pay of S$4,000. Subtracting the CPF contributions, and expenses, let’s assume a S$2,000 budget that we will be working with.
Without further ado, let’s unveil the four stocks.
1. Singapore Exchange Limited (SGX: S68)
Singapore Exchange, or SGX, is Singapore’s sole stock exchange operator with a suite of products ranging from equities, fixed income, to currency and commodity markets.
To meet the evolving demands of its clients, SGX has broadened its reach in foreign exchange-related products and markets and furthered investors’ participation in China through its suite of China access products.
In March 2022, Climate Impact X, a carbon credits trading market was launched by SGX in collaboration with DBS Group (SGX: D05) and Temasek Holdings.
Climate Impact X aims to support organisations in their carbon reduction efforts.
SGX is also a consistent dividend payer, and has been gradually increasing its dividend per share from S$0.30 in fiscal year 2019 (FY2019) to S$0.32 in FY2021.
Source: Singapore exchange, financials & statistics
For its fiscal 2022 first half (1H2022), SGX declared a total dividend of S$0.16 per share. At a unit price of S$9.67, this translates to a trailing 12-month (TTM) dividend yield of 3.3%
2. Sheng Siong Group Ltd (SGX: OV8)
Sheng Siong is one of the largest supermarket chain operators in Singapore with 65 outlets island-wide.
Many of you may have visited one of its outlets to purchase anything from fresh food to household items.
One may recall how shelves were emptied out during the lead up to the first circuit breaker in Singapore.
Its resilience despite bad times is largely attributable to the necessity-based shopping it provides.
Although pandemic-driven demand growth is expected to taper off in 2022, Sheng Siong’s long-term growth plan is to open three to five stores per year in the next three to five years.
Despite rising costs as a result of supply chain lockdowns, it’s interesting to note that Sheng Siong’s gross profit margin has been consistently rising yearly for the past five years.
This demonstrates strength in its ability to control its sourcing costs while maintaining profitability.
Source: Sheng Siong investor relations; gross profit margin
A total dividend of S$0.062 was paid out for FY2021. At a unit price of S$1.53, this translates to an annualised dividend yield of 4.1%.
3. ParkwayLife REIT (SGX: C2PU)
ParkwayLife REIT is one of Asia’s largest listed healthcare REITs that first started out with three Singapore private hospitals; Mount Elizabeth Hospital, Gleneagles Hospital, and Parkway East Hospital.
Today, its portfolio size has grown to 56 properties totalling S$2.29 billion.
The asset mix of ParkwayLife REIT is split between Nursing Homes (35.4%), and Hospitals and Medical Centres (64.6%).
The majority of its property revenue comes from Singapore (60.5%), with the remainder coming from Japan (35.4%) and Malaysia (0.3%).
ParkwayLife REIT’s core distribution per unit (DPU) has been growing steadily since its initial public offering (IPO) in 2007 .
Source: ParkwayLife REIT, 1Q22 business update
In fact, DPU has grown a total of 122.8% since its IPO!
Based on the unit price of S$4.95 and DPU of S$0.1408 in FY2021, ParkwayLife REIT’s dividend yield stands at 2.8%.
4. Frasers Centrepoint Trust (SGX: J69U)
Frasers Centrepoint Trust, or FCT, is a retail REIT that operates a portfolio of nine suburban malls and an office building in Singapore.
It is the second largest suburban retail space owner in Singapore.
With all its malls located on or next to MRT stations, it is likely that you have visited one yourself..
While suburban retail’s defensiveness was apparent during the movement restrictions phase, the cessation of work-from-home policies will benefit FCT’s malls even more.
The lifting of group sizes since April 26, will also directly benefit FCT’s portfolio of malls as more families dine in.
As of 1H2022, FCT’s retail occupancy rate stood at 97.8%; a sign of continued strength from tenants’ willingness to renew their leases and stay on.
A DPU of S$0.06136 has also been declared for 1H2022.
At a unit price of S$2.29, this represents a trailing 12-month distribution yield of 5.3%.
If I purchased one hundred shares of each stock listed above with a S$2,000 budget, it would add up to S$1,841, which leaves me with enough money to buy some bubble tea and get a Grab (NASDAQ: GRAB) ride home.
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.
Disclaimer: Kent Lee owns shares of Sheng Siong.