Blue-chip stocks may be a mainstay of the stock market, but investors can also consider other types of stocks to help diversify their portfolios.
One important criterion is that these companies need to report higher revenue and profits to ensure that they qualify as suitable growth stocks.
Over time, if these stocks continue to grow in size and can consistently churn out higher profits and free cash flow, they could be upgraded to blue-chip stocks.
Here are five attractive blue-chip candidates to consider for your buy watchlist.
VICOM (SGX: WJP)
VICOM provides inspection and technical testing services.
These include vehicle testing and non-vehicle testing services in fields such as mechanical, biochemical, civil engineering, and non-destructive testing.
For the first quarter of 2025 (1Q 2025), revenue climbed 18.9% year on year to S$33.3 million.
Operating expenses, however, jumped 23.2% year on year, resulting in operating profit rising by 8.7% year on year to S$9 million.
Net profit improved by 7.5% year on year to S$7.5 million.
VICOM continued to install on-board units (OBUs) for the Electronic Road Pricing 2.0 system, with a total of 53,000 installed for the quarter, up from 35,000 in the prior quarter.
Demand for non-vehicle testing has also improved, but the recent escalation in trade tensions could depress Singapore’s economy and result in slower growth.
The group generated a healthy positive free cash flow of S$4.5 million for 1Q 2025.
UMS Integration (SGX: 558)
UMS Integration provides equipment manufacturing and engineering services to original equipment manufacturers (OEMs) of semiconductors and related products.
The group announced an encouraging set of results for 1Q 2025 as the semiconductor industry looks to turn around.
Revenue rose 8% year on year to S$57.7 million while net profit remained flat year on year at S$9.8 million.
UMS Integration generated a small positive free cash flow of S$400,000 for the quarter.
An interim dividend of S$0.01 was declared, lower than the prior year’s S$0.012.
Management reported a brighter outlook as there is strong order flow from UMS’ new key customer as it seeks to divert its US supply source to Asia.
Fab equipment spending is also projected to rise by 18% in the following year, reaching US$130 billion, with high-performance computing (HPC) and artificial intelligence (AI) being the two main drivers.
The group remains optimistic and will carry on with the qualifications of many new products for its new key customers in the coming months.
Micro-Mechanics (Holdings) (SGX: 5DD)
Micro-Mechanics (Holdings), or MMH, supplies high precision tools and parts for process-critical applications in the wafer fabrication and assembly processes of the semiconductor industry.
The group reported a strong set of earnings for the first nine months of fiscal 2025 (9M FY2025) ending 31 March 2025.
Revenue increased by 12.9% year on year to S$48.5 million while gross profit jumped 18.6% year on year to S$24 million.
MMH also churned out a positive free cash flow of S$12.1 million, up 47% year on year.
The group achieved positive momentum from the restructuring of its US subsidiary, with a third consecutive quarter of profitability.
MMH also continues to progress with its “Five-Star Factory” initiative to improve the efficiency of its operations.
Management believes that the semiconductor industry is in the advanced stages of rebalancing inventory and production.
World Semiconductor Trade Statistics (WSTS) expects semiconductor sales to grow 19% year on year for 2025 to US$627 billion, which should benefit MMH.
ComfortDelGro Corporation (SGX: C52)
ComfortDelGro Corporation, or CDG, is a multi-modal transport operator with a network spanning buses and rail and includes point-to-point transport with taxis and private hire cars.
The group’s operations span 13 countries, serving millions of people each day.
For 1Q 2025, CDG saw revenue improve by 16.4% year on year to S$1.17 billion, fuelled by contributions from its A2B and Addison Lee acquisitions and improved margins for its UK London Public Transport contract renewal.
Operating profit shot up 45.5% year on year to S$81.5 million while net profit increased by 19% year on year to S$48.3 million.
The group has sufficient cash and facilities to cater for fleet capital expenditure and electrification.
CDG is developing large-scale robotaxi operations and fleet management capabilities starting with a 100-robotaxi trial in Nansha, Guangzhou commencing March 2025.
If this trial is successful, it should pave the way for the operation of robotaxis by the authorities within the next five years.
CDG may pursue small, complementary bolt-on acquisitions in 2025, but management’s main focus will be on realising synergies from its acquisitions in 2024.
Fraser & Neave (SGX: F99)
Fraser & Neave, or F&N, is a consumer group with a Food & Beverage division and Printing & Publishing segment.
Some of the group’s popular brands include 100Plus, Nutri-Soy, Magnolia Milk, and Ice Mountain mineral water.
For the first half of fiscal 2025 (1H FY2025) ending 31 March 2025, F&N reported a 13.2% year-on-year improvement in revenue to S$1.2 billion.
Net profit inched up 0.4% year on year to S$84.1 million.
The group generated a positive free cash flow of nearly S$30 million for 1H FY2025.
An interim dividend of S$0.015 was declared, unchanged from a year ago.
Last month, F&N welcomed the arrival of its first commercial batch of 2,500 dairy cattle at its Malaysian integrated dairy farm.
Milking of this batch should commence by June 2025, with fresh milk gradually introduced under the Magnolia brand.
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Disclosure: Royston Yang owns shares of VICOM and Micro-Mechanics.
