In times of economic uncertainty, investors turn to dependable names that help to shelter their portfolio from sharp declines.
Blue-chip stocks qualify as safe havens because of their long track record and experience in dealing with economic cycles.
Not only are such businesses more resilient, but most of them also dish out a dividend to boot.
These dividends act as a steady stream of passive income that helps to boost your earned income.
We identified several blue-chip stocks with robust business models that offer a dividend yield of 5.7% and above that could end up on your buy watchlist.
DBS Group (SGX: D05)
DBS is Singapore’s largest bank by market capitalisation and offers a wide range of banking, investment, and insurance services to individuals and corporations.
The lender had reported an impressive set of results for the first half of 2023 (1H 2023).
Total income climbed 34% year on year to a new record high of S$ 10 billion as rising interest rates boosted the bank’s net interest income.
Net profit jumped 44% year on year to S$5.2 billion.
A quarterly dividend of S$0.48 was declared and paid, translating to an annualised dividend of S$1.92 per share.
This dividend was 33.3% higher than the prior year’s quarterly dividend of S$0.36.
DBS’s shares provide an annualised forward dividend yield of 5.7%.
Looking ahead, the bank has reiterated its guidance for a baseline annual dividend increase of S$0.24, barring unforeseen circumstances.
CEO Piyush Gupta believes that the bank’s net interest margin could see further upside as the US Federal Reserve looks poised to continue raising interest rates to combat inflation.
Around 20% of DBS’s loan book also has yet to reprice to higher rates.
Net profit could also receive a further boost from fee income derived from higher spending on credit cards and the expected increase in momentum for wealth management services.
Hongkong Land Holdings (SGX: H08)
Hongkong Land, or HKL, is a property development, investment and management group that owns and manages more than 850,000 square metres of prime office and luxury retail assets.
The group is present in cities such as Singapore, Hong Kong, Jakarta, Shanghai and Beijing.
HKL reported a respectable set of earnings for 1H 2023 despite the macroeconomic headwinds.
Revenue declined by 25% year on year to US$670.3 million because of fewer completed development projects.
Underlying profit, however, dipped by just 1% year on year to US$422 million.
The property giant maintained its interim dividend of US$0.06 per share, taking its trailing 12-month dividend to US$0.22.
Shares of HKL offer a trailing dividend yield of 6.3%.
The group reported healthy market conditions in Singapore with vacancy across its office portfolio staying low at just 2.1% as of 30 June 2023.
HKL has ambitious plans as the group seeks to increase its property portfolio.
It plans to open 10 retail developments across China’s seven cities in the next five years while working to complete the US$8 billion West Bund Financial Hub in Shanghai by 2027.
Venture Corporation Limited (SGX: V03)
Venture Corporation is a provider of technology products, solutions, and services.
The group employs more than 12,000 staff and has clients in sectors such as life sciences, medical devices, genomics, and luxury lifestyle and wellness technology.
For 1H 2023, the group saw revenue slip 11.9% year on year to S$1.6 billion on weaker sales as the semiconductor industry goes through a cyclical downturn.
Net profit fell by 20% year on year to S$140 million.
The technology company, however, maintained its interim dividend at S$0.25.
Venture’s trailing 12-month dividend stood at S$0.75, giving its shares a trailing dividend yield of 6.1%.
The group is working with partners and customers to diversify their presence into Venture’s other manufacturing sites in Southeast Asia.
By doing so, it hopes to capture more market share.
The business is also seeing good traction in new customer acquisition and new product introduction activities.
Mapletree Industrial Trust (SGX: ME8U)
Mapletree Industrial Trust, or MIT, is an industrial REIT with a portfolio of 85 properties in Singapore and 56 in the US.
Its total assets under management stood at S$8.8 billion as of 30 June 2023.
The manager reported a respectable set of earnings for the REIT’s fiscal 2024 first quarter (1Q FY2024) ending 30 June 2023.
Gross revenue inched up by 1.7% year on year to S$170.6 million while net property income improved by 0.7% year on year to S$130.8 million.
Distribution per unit, however, slid by 2.9% year on year to S$0.0339 on the back of higher finance costs and a larger unit base from a private placement done in May.
MIT’s trailing 12-month DPU came in at S$0.1347, giving its units a trailing distribution yield of 6.2%.
The REIT had just completed the acquisition of a data centre in Osaka, Japan.
The manager intends to continue pursuing accretive acquisitions and developments while looking at selective divestments of non-core assets.
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Disclosure: Royston Yang owns shares of DBS Group and Mapletree Industrial Trust.
