It is always a great feeling to have some spare cash.
However, it is not a good idea to leave it in some bank account where it will get eroded by inflation.
Instead, you should think of investing the money in solid, dependable stocks to help it grow.
Blue-chip stocks immediately come to mind when you think of reliability as they have a long track record of surviving through good and bad times.
If you have S$40,000 to spare, you may wish to allocate it equally to these four promising blue-chip stocks.
CapitaLand Integrated Commercial Trust (SGX: C38U)
CapitaLand Integrated Commercial Trust, or CICT, is a retail and commercial REIT with a portfolio of 21 properties in Singapore, two in Germany, and three in Australia.
The REIT’s assets under management stood at S$24.2 billion as of 31 December 2022.
CICT declared a slightly higher year-on-year distribution per unit of S$0.053 back when it reported its first half of 2023 earnings.
This is quite an achievement when you consider that the REIT sector was pummelled by a combination of high inflation and surging interest rates.
For its latest business update for the third quarter of 2023 (3Q 2023), CICT reported a 4.6% year-on-year increase in gross revenue to S$391.3 million.
Its net property income (NPI) inched up 0.6% year on year to S$275 million.
The REIT’s operating metrics were also strong.
Portfolio committed occupancy stood at 97.3% with the retail and commercial segments enjoying positive rental reversions of 7.8% and 8.8%, respectively.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The bourse operator operates a platform for the buying and selling of stocks, bonds, derivatives, and other investments.
SGX demonstrated its resilience by reporting an admirable set of earnings for its fiscal 2023 (FY2023) ending 30 June 2023.
Revenue rose 8.7% year on year to S$1.2 billion while net profit (excluding exceptional items) increased by 10.3% year on year to S$503.2 million.
In line with the good results, the exchange increased its quarterly dividend from S$0.08 to S$0.085, bringing its annualised dividend per share to S$0.34.
CEO Loh Boon Chye is confident that SGX can play to its strengths and morph into an attractive multi-asset hub.
The group’s foreign exchange (FX) franchise saw a record performance for FY2023 and its over-the-counter average daily volume hit US$75.8 billion for the fiscal year and is on track to surpass US$100 billion by 2025.
SGX is targeting high single-digit revenue growth in the medium term and believes it can increase its dividend per share by mid-single-digits, subject to earnings growth.
DBS Group (SGX: D05)
DBS is Singapore’s largest bank by market capitalisation and offers a wide range of services including personal and corporate banking, bancassurance, and investments.
The group pulled off a sterling performance for its recent 3Q 2023 earnings.
For the first nine months of 2023 (9M 2023), total income climbed 27% year on year to S$15.2 billion on the back of a 46% year-on-year jump in net interest income to S$10.6 billion.
Net profit surged 33% year on year to S$7.8 billion with the bank’s results buoyed by higher interest rates.
An interim dividend of S$0.48 was paid out, 33% higher than the S$0.36 paid in the prior year.
The bank’s annualised dividend now stands at S$1.92 per share.
With interest rates poised to stay higher for longer, DBS could see its financial performance staying robust as we head into 2024.
CEO Piyush Gupta believes that fee income can be sustained by wealth management fees and card spending.
However, loan growth may be challenging even as the high rates support the bank’s net interest margin.
Singapore Technologies Engineering Ltd (SGX: S63)
Singapore Technologies Engineering, or STE, is an engineering and technology group serving customers in the aerospace, smart city, defence, and public security sectors.
For its 3Q 2023 business update, STE continued to see healthy top-line growth.
9M 2023 revenue rose 12% year on year to S$7.3 billion, with growth recorded in all three segments (excluding its US marine business).
The commercial aerospace division grew revenue by 30% year on year to S$2.8 billion for 9M 2023 as air travel posted a strong recovery.
The engineering group reported an impressive haul of S$11.7 billion in new contracts for 9M 2023, bringing its order book to S$27.5 billion as of 30 September 2023.
Of this order book, S$2.5 billion will be delivered in the remainder of this year.
An interim dividend of S$0.04 was declared for 3Q 2023, bringing STE’s annualised dividend to S$0.16 per share.
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Disclosure: Royston Yang owns shares of DBS Group and Singapore Exchange Limited.
