Blue-chip stocks are so-named because of their ability to brave through multiple economic cycles.
Such stocks qualify as a dependable layer of stocks to serve as the bedrock of investors’ portfolios.
In addition to remaining resilient in the face of economic headwinds, most blue-chip stocks also dish out a dividend.
This source of passive income, coupled with the peace of mind afforded by this category of stocks, makes them a popular choice for many investors.
Here are four Singapore blue-chip stocks that could be perfect for your portfolio.
OCBC Ltd (SGX: O39)
OCBC is Singapore’s second-largest bank by market capitalisation.
The lender offers a comprehensive range of services including banking, insurance, and investments for both individuals and corporations.
OCBC released a sparkling set of earnings for the first quarter of 2024 (1Q 2024).
Net interest income rose 4% year on year to S$2.4 billion for the quarter.
Total income increased by 8% year on year to S$3.6 billion while operating profit improved by the same quantum to S$2.3 billion.
Net profit rose 5% year on year to a record high of S$1.98 billion.
OCBC not only reported its highest-ever quarterly profit but has also been steadily increasing its annual dividend.
From 2020 to 2023, its yearly dividend increased from S$0.318 to S$0.82.
CEO Helen Wong remains confident about the year ahead and believes that the group is on track to deliver on its strategic initiatives.
The bank recently made an offer to purchase the remaining shares of Great Eastern Holdings (SGX: G07) that it does not own.
If successful, the insurer will help to enhance OCBC’s profits and improve its return on equity.
Singapore Technologies Engineering (SGX: S63)
Singapore Technologies Engineering, or STE, is a technology and engineering group with customers across the aerospace, smart city, defence, and public security sectors.
The group announced a robust set of earnings for 2023 with revenue rising nearly 12% year on year to S$10.1 billion.
Operating profit increased by 24% year on year to S$915 million but would have been higher by 40% year on year at S$946 million if one-off items were excluded.
Net profit excluding one-off items shot up 24% year on year to S$610 million.
STE declared a final dividend of S$0.04, taking 2023’s total dividend to S$0.16.
The engineering group’s 1Q 2024 saw this momentum continue.
Revenue was 18% higher year on year at S$2.7 billion with two of its major divisions, Commercial Aerospace and Defence & Public Security, registering double-digit year-on-year revenue growth.
STE secured contract wins of S$3 billion for 1Q 2024 which helped to propel its order book to S$27.7 billion as of 31 March 2024.
Of this order book, S$6.5 billion is expected to be delivered for the rest of this year.
CapitaLand Investment Limited (SGX: 9CI)
CapitaLand Investment Limited, or CLI, is a global real estate manager with assets under management (AUM) of S$134 billion and funds under management (FUM) of almost S$100 billion as of 31 December 2023.
The group reported a steady set of earnings for 2023 with a slight 3.2% year on year dip in revenue to S$2.8 billion.
Its fee income-related business (FRB) revenue, however, improved by 8.7% year on year to S$1.1 billion.
Core net profit declined by 6.7% year on year to S$568 million but CLI kept its core final dividend of S$0.12 constant from the previous year.
1Q 2024 saw its FRB revenue increase by 7% year on year to S$274 million.
CLI is also advancing on its capital recycling strategy with S$464 million of assets divested in 1Q 2024, sharply higher than the S$6 million sold off a year ago.
The property group targets to increase its FUM to S$200 billion in five years.
Meanwhile, CLI’s lodging management (LM) division also saw an improved performance as air travel and tourism recovered.
LM’s fee-related earnings rose 8% year on year to S$82 million for the quarter with more than 4,600 units signed across 22 properties.
Venture Corporation Limited (SGX: V01)
Venture Corporation is a provider of technology products, services, and solutions and serves a variety of different sectors such as life sciences, genomics, healthcare, networking, and communications.
The semiconductor sector is going through a cyclical downturn now, causing the group to report a near-27% year-on-year fall in net profit to S$270 million for 2023.
Despite the weaker results, Venture still maintained its full-year dividend of S$0.75 per share.
The contract manufacturing giant also generated a positive free cash flow of S$473.9 million, double the S$236.4 million churned out in 2022.
1Q 2024 saw continued weakness with revenue falling nearly 19% year on year to S$666.7 million and net profit tumbling by 18.3% year on year to S$60.1 million.
Management sees a better performance in the second half of 2024 compared to the first.
Based on customers’ feedback, demand is strengthening in several technology domains, a good sign that the downturn may be easing.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
