Blue-chip stocks deserve a place in every investor’s portfolio because of their large size, scale, and stability.
What’s more, all of them also pay out a dividend.
However, investors may wish to diversify their holdings away from blue-chips stocks and look at smaller mid-cap companies.
Such companies could have a growing business while also paying out dividends at the same time.
To broaden your horizon, here are five small and mid-cap companies that you can add to your buy watchlist.
Nanofilm Technologies (SGX: MZH)
Nanofilm is a leader in nanotechnology solutions and specialises in advanced coatings, nanofabrication, and hydrogen fuel cell innovations.
Last year, the group reported a strong set of earnings with revenue rising 15.4% year on year to S$204.3 million.
Gross profit improved by 15.7% year on year to S$75.9 million, while net profit more than doubled year on year to S$7.5 million.
The group declared a final dividend of S$0.0033 last year, unchanged from a year ago.
2024’s total dividend stood at S$0.0066 as it included an interim dividend of S$0.0033.
Nanofilm’s performance has continued into the first quarter of 2025 (1Q 2025).
Revenue rose 12% year on year to S$44 million, led by stronger performances for its advanced materials and nanofabrication business units.
However, gross margin dipped to 27% in 1Q 2025, down from 33% a year ago.
Management intends to improve the group’s global footprint to enhance its proximity to customers and provide supply chain resilience.
Nanofilm will also strengthen its technology through scalable, high-efficiency platforms that enhance productivity.
Tai Sin Electric (SGX: 500)
Tai Sin Electric, or TSE, provides comprehensive electrical cabling and wiring solutions for both the private and public sectors for industrial, commercial, residential, and infrastructure projects.
The group reported a solid set of earnings for the first half of fiscal 2025 (1H FY2025) ending 31 December 2024.
Revenue climbed 20% year on year to S$235.1 million while gross profit improved by 28% year on year to S$41.3 million.
Net profit shot up 126% year on year to S$15.9 million.
TSE also generated a positive free cash flow of S$4.1 million in 1H FY2025, reversing the prior year’s negative free cash flow.
The group declared an interim dividend of S$0.0075, unchanged from a year ago.
ST Group Food Industries (SGX: DRX)
ST Group Food Industries holds the exclusive franchise and licence rights for six international food and beverage brands such as PappaRich, NeNe Chicken, and Gong Cha.
The group operates in the markets of Australia, New Zealand, and the UK.
For 1H FY2025, ST Group Food reported a slight 4.7% year-on-year dip in revenue to A$34 million.
Net profit declined by 7.6% year on year to A$1.26 million.
The business generated a positive free cash flow of A$2.2 million for the half-year, half of what it churned out a year ago.
An interim dividend of A$0.004 was declared, similar to a year ago.
The group plans to open more outlets for Homm, PappaRich, and NeNe Chicken in Singapore, Australia, and Gong Cha in New Zealand, as part of its expansion strategy.
Hotung Investment (SGX: BLS)
Hotung Investment is Taiwan’s only venture capital investment management group.
The group has invested in over 700 companies with a total value of more than US$5 billion over the past three decades.
For 2024, Hotung reported a 32.6% year-on-year increase in revenue to NT$431.8 million.
Net profit stood at NT$191.6 million, up an impressive 68.4% year on year.
A final dividend of NT$2.55 was declared, unchanged from a year ago.
Management warned that ongoing geopolitical events such as the Russia-Ukraine conflict have disrupted global markets and added complexity to the economic landscape.
However, Hotung has renewed and refreshed its investment team and also widened its geographic horizon to enable more investments in the medium term.
Marco Polo Marine (SGX: 5LY)
Marco Polo Marine, or MPM, offers shipyard, offshore energy, and marine transportation services.
The group saw revenue dip slightly by 3% year on year to S$123.5 million for the fiscal year 2024 (FY2024) ending 30 September 2024.
Operating profit decreased by 11% year on year to S$27.2 million while net profit dipped by 4% year on year to S$21.7 million.
However, MPM generated a negative free cash flow of S$24.2 million.
A final dividend of S$0.01 was declared, similar to what was paid out a year ago.
MPM reported a slightly downbeat business update for 1Q FY2025.
Revenue fell by 11% year on year to S$25.8 million while gross profit dipped 9% year on year to S$10.6 million.
Management believes that its ship chartering segment will continue to drive growth as the tight demand-supply balance should drive demand for offshore supply vessels (OSVs) and support charter rates.
The strong momentum in shipyard utilisation rates should also persist into FY2025.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
