During times of economic stress, it’s always good to rely on something steady to calm our nerves.
When it comes to investing, blue-chip stocks evoke images of stability, certainty and safety.
The world is currently beset by the dual problems of high inflation and rising interest rates.
Even Prime Minister Lee Hsien Loong has warned of an impending recession in either 2023 or 2024.
Although the mood is bearish, you can view this as a great opportunity to scoop up shares of solid companies for the long term.
And with numerous companies’ share prices touching a year low, there could be bargains that are ripe for the picking.
Here are five reliable blue-chip stocks that may end up on your buy watchlist.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The bourse operator has seen its shares slide by close to 13% in one year to hit a 52-week low of S$8.32.
Despite the fall, SGX reported a decent set of earnings for its fiscal 2022 (FY2022) ending 30 June 2022.
Revenue inched up 4% year on year to S$1.1 billion, a new record since the group’s IPO, while net profit edged up 1% year on year to S$451 million.
A dividend of S$0.32 was paid for FY2022, similar to a year ago.
SGX enjoys a natural monopoly and its multi-asset platform continues to attract investors who are looking for different ways to invest and hedge their investment portfolios.
CapitaLand Investment Limited (SGX: 9CI)
CapitaLand Investment Limited, or CLI, is a real estate investment manager (REIM) with S$125 billion of property assets under management (AUM) and S$86 billion of funds under management as of 30 June 2022.
CLI has seen its share price slide to a year-low of S$3.24, down 4.1%.
The property giant has reported a robust set of earnings for its fiscal 2022’s first half (1H2022).
Revenue jumped 29.1% year on year to S$1.35 billion while operating profit after tax (excluding one-off effects) rose 31.1% year on year to S$346 million.
CLI also reported higher fee-related earnings and added more lodging units under its lodging management arm.
The group targets to grow its funds under management to S$100 billion by 2024 and expand its lodging units to 160,000 (current: 139,000) by 2023.
Frasers Logistics & Commercial Trust (SGX: BUOU)
Frasers Logistics & Commercial Trust, or FLCT, owns a portfolio of 105 properties with an AUM of S$6.5 billion as of 30 June 2022.
FLCT’s properties are spread out across the UK, Germany, Singapore, Australia and the Netherlands and enjoy a high occupancy rate of 96.5%.
In the past year, units of the REIT have plunged by 25% to hit a low of S$1.11.
FLCT has a well-spread-out tenant profile with its largest tenant taking up just 5.1% of gross rental income.
Its aggregate leverage stood at 29.2% with a low cost of debt of just 1.9%, giving the REIT a debt headroom of S$2.9 billion for acquisitions to boost its distribution per unit (DPU).
Also, 80.6% of its debt is on fixed rates, thus mitigating the risk of a sharp increase in finance expenses.
Singapore Technologies Engineering Limited (SGX: S63)
Singapore Technologies Engineering Limited, or STE, is a technology and engineering group serving the aerospace, smart city, and defence segments.
The engineering group’s shares have skidded 17.5% in the past year and hit a 52-week low of S$3.20.
STE had reported a strong set of earnings for 1H2022, with revenue rising 17% year on year to S$4.3 billion.
Net profit excluding one-off expenses and government support rose 4% year on year to S$307 million.
A second interim quarterly dividend of S$0.04 was paid out, and STE’s forward dividend yield stood at 5%.
The engineering giant has continued to clinch new contracts, securing S$3.1 billion worth of them in the second quarter of this year.
STE’s order book remains robust at S$22.2 billion with S$4.6 billion expected to be delivered for the rest of 2022.
Mapletree Logistics Trust (SGX: M44U)
Mapletree Logistics Trust, or MLT, owns a portfolio of 185 properties across eight countries with an AUM of S$13 billion as of 30 June 2022.
The logistics REIT has seen its unit price fall by 24.7% in a year to a 52-week low of S$1.49.
Despite this fall, MLT still recorded growth for its revenue, net property income (NPI) and DPU for its fiscal 2023’s first quarter (1Q2023).
Revenue and NPI increased by 14.6% and 13.2% year on year, respectively, while DPU rose 5% year on year to S$0.02268.
Thus far, MLT’s portfolio has held up well.
As of 30 June 2022, the occupancy rate stood high at 96.8% and the quarterly rental reversion was a positive 3.4%.
The REIT also has 80% of its debt hedged to fixed rates along with saggregate leverage of 37.2%.
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Disclaimer: Royston Yang owns shares of Singapore Exchange Limited and Frasers Logistics & Industrial Trust.
