As you leave your 50s behind and hit the age bracket for retirement, your investment priorities will naturally change.
Wealth preservation should be at the top of the list, as many want to be able to leave a tidy sum of money behind for their loved ones.
Meanwhile, as you enter retirement, your employment income goes away.
As such, another consideration would be how your savings can generate passive income.
Stocks that fit these criteria usually include dependable blue-chip names and stable REITs with strong sponsors and a great track record.
These businesses can usually weather the economic storms and continue to churn out dividends that can sustain your lifestyle when you call it a day.
Here are four stocks that are ideal for your golden years.
Parkway Life REIT (SGX: C2PU)
Parkway Life REIT is a healthcare REIT with a portfolio comprising three hospitals in Singapore, 51 nursing homes in Japan, and a specialist clinic in Kuala Lumpur, Malaysia.
As of 30 June 2021, its assets under management (AUM) totalled around S$2 billion.
Parkway Life REIT’s properties have remained resilient despite the downturn, and the REIT has a track record of uninterrupted distribution per unit (DPU) growth since its IPO in 2007.
For its fiscal 2021 first half (1H2021), gross revenue and net property income dipped by 1% and 0.9% year on year, respectively.
However, distributable income inched up 4% year on year while DPU increased by the same quantum to S$0.0695.
Based on the annualised DPU of S$0.139, the REIT provides a 3% dividend yield..
The REIT has announced a master lease renewal for its three hospital assets along with a capital expenditure plan to spruce up the properties.
The lease renewal was approved during yesterday’s EGM, and should provide greater certainty on rental income and raise DPU to S$0.1826 in four years.
OCBC Ltd (SGX: O39)
OCBC is one of Singapore’s three big local banks and has more than 460 branches and representative offices in 19 countries and regions.
The lender provides an array of banking services including commercial banking, wealth management, insurance, and asset management.
The group reported a robust set of earnings for its 2021 second quarter, with net profit exceeding S$1 billion as wealth management income surged.
OCBC also restored its interim dividend to 2019’s level of S$0.25 as the Monetary Authority of Singapore lifted dividend restrictions on the local banks.
The good results offer assurance to investors that the bank can hold its own through downturns and yet emerge relatively unscathed.
New CEO Helen Wong plans to double OCBC’s wealth bankers over the next two years in both Singapore and Hong Kong to capture more business opportunities.
The bank will also ramp up its capabilities in investment banking and intends to extract more insights from data analytics.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, is a logistics REIT that owns a diversified portfolio of 163 properties as of 30 June 2021.
The REIT’s AUM stands at S$10.7 billion and its properties are spread out across Singapore, Japan, Australia, and China, to name a few countries.
MLT has a strong sponsor in Mapletree Investments Pte Ltd, a unit of Temasek Holdings.
The REIT has performed admirably despite the tough conditions.
Gross revenue for its fiscal 2022 first quarter (1Q2022) for the period ended 30 June 2021 jumped by 23.7% year on year to S$163.7 million, while net property income increased by 21.3% year on year.
DPU inched up at a slower 5.7% year on year to S$0.02161 due to an enlarged unit base.
The prospective dividend yield is around 4.3% based on the annualised DPU of S$0.08644.
MLT continues to expand its portfolio with the recent acquisition of a cold storage facility in Melbourne, Australia, for S$42.8 million.
Frasers Centrepoint Trust (SGX: J69U)
Frasers Centrepoint Trust, or FCT, is a retail REIT that owns a portfolio of nine suburban malls in Singapore.
The total net lettable area is around 2.2 million square feet and the REIT’s AUM stands at S$6.2 billion as of 30 June 2021.
For FCT’s 1H2021 earnings ended 31 March 2021, the REIT saw gross revenue surge by 73.8% year on year as the additional contributions from the newly acquired AsiaRetail Funds portfolio of five malls kicked in.
DPU jumped by 28.4% year on year to S$0.05996. Dividend yield stood at 5.3% based on annualised DPU of S$0.11992.
As of 30 June 2021, portfolio occupancy at a respectable 96.4% despite prevailing COVID-19 restrictions.
As of July 2021, shopper traffic remains at 60% of pre-COVID levels but tenant sales have recovered to under 9% from pre-pandemic levels.
With gearing at 33.9%, FCT has ample room to gear up for further acquisitions to boost its portfolio and DPU.
We found 5 SGX stocks that can pay you dividends for life. Find out their names, and why at least one of them should sit in your portfolio in our special FREE report. Click here to download the report now.
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Disclaimer: Royston Yang does not own shares in any of the companies mentioned.
