The Central Provident Fund (CPF) has been instrumental in helping Singaporeans to save for their retirement.
What’s more, the Ordinary Account (OA) also allows flexibility in how the funds are used, be it for education, housing, or investment.
The CPF OA currently enjoys a 2.5% interest rate that is nearly risk-free as the Singapore government has been accorded the strongest credit rating by international credit rating agencies.
However, with Singapore’s core inflation running at 3.8% in July, your funds in the CPF OA will end up losing money.
Hence, you can consider parking some of the funds in the account in suitable investments to help grow it above the inflation rate.
Here are three resilient blue-chip stocks that offer a great mix of both growth and dividends.
Singapore Technologies Engineering Ltd (SGX: S63)
Singapore Technologies Engineering, or STE, is a technology and engineering group with businesses that span the smart city, aerospace, defence, and public security sectors.
The group reported a respectable set of earnings for its 2023 first half (1H 2023).
Revenue rose 13.9% year on year to S$4.9 billion while operating profit climbed 16.8% year on year to S$420.8 million.
Net profit inched up 0.2% year on year to S$280.6 million but was affected by one-off expenses.
Stripping these out, net profit would have jumped 26% year on year to S$300 million.
STE declared an interim dividend of S$0.04, bringing its annualised full-year dividend to S$0.16
Shares of the engineering group provide an attractive dividend yield of 4.2%.
STE secured a total of around S$9.5 billion in new contracts for 1H 2023.
As a result, its order book has grown to S$27.7 billion from S$23 billion in just six months, with S$4.4 billion of these contracts expected to be delivered in the remainder of 2023.
DBS Group (SGX: D05)
DBS needs no introduction, being the largest of the three Singaporean banks with a market capitalisation of close to S$86 billion.
The lender reported a stellar set of earnings for 1H 2023 as rising interest rates boosted its bottom line.
For 1H 2023, the bank’s total income rose 34% year on year to S$10 billion with net interest income soaring 61% year on year to S$7 billion.
Net profit soared 44% year on year to S$5.2 billion.
DBS upped its quarterly dividend to S$0.48, a sharp 33.3% year on year increase from the S$0.36 paid out a year ago.
With an annualised dividend of S$1.92, DBS’s shares are yielding 5.7%.
There could be more growth for DBS on the horizon.
Last month, the bank announced the completion of the acquisition of Citigroup’s (NYSE: C) Taiwan consumer banking business.
This purchase will propel DBS’s Taiwan revenue past the S$1.3 billion mark.
With interest rates potentially staying high for the remainder of 2023 and into next year, DBS looks poised to continue enjoying elevated net interest income.
Yangzijiang Shipbuilding Holdings Ltd (SGX: BS6)
Yangzijiang Shipbuilding, or YZJ, is one of the largest shipbuilding companies in China.
The group has four shipyards in China and manufactures a broad range of vessels including large containerships, bulk carriers, and LNG carriers.
1H 2023 saw an impressive performance from the shipbuilder as revenue climbed 16% year on year to RMB 11.3 billion.
Net profit soared by 47% year on year to RMB 1.7 billion.
The group paid out a total dividend of S$0.05 last year, giving its shares a trailing dividend yield of 2.9%.
Free cash flow for 1H 2023 catapulted 143% year on year to RMB 2.2 billion, thereby increasing the likelihood that YZJ will increase its dividend when it reports its full-year results.
In the first six months of this year, the shipbuilder grew its order book to a historic high of US$14.7 billion, up 40% from US$10.5 billion at the end of 2022.
In addition, the group also secured its first-ever orders for methanol dual-fuel containerships.
Its order wins for 1H 2023 have touched US$5.76 billion, easily surpassing its full-year 2023 goal of US$3 billion.
Regulatory revisions look set to drive fleet decarbonisation for containership owners, leading them to replace their vessels and thereby boosting the prospects for YZJ and its order book.
By the time your child grows up, inflation will have gobbled up their savings. If you not only want to protect their money but also grow it, there are 3 SGX stocks you can consider buying. One has already proven to give a 55.8% dividend pay rise. Get all the details in our latest special FREE report. Just click here.
Disclosure: Royston Yang owns shares of DBS Group.
