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Investing in blue-chip stocks is an established strategy for those looking to build wealth over the long term. They are seen as the foundation of any robust portfolio, offering a haven of stability and consistent returns that can weather the market's unpredictable swings. This makes them particularly popular among investors in Singapore, where economic stability and growth have made these established investments a common choice for those looking to cultivate sustainable long-term portfolio growth.
As one of Asia's leading financial hubs, Singapore is home to a number of blue-chip companies that offer attractive dividend yields. We will explore the best high dividend blue-chip stocks in Singapore for the year 2023, providing insights into their performance, dividend yields, and future prospects. Whether you're an experienced investor or just beginning your investment journey, you'll discover how to initiate the purchase and investment of blue-chip stocks. These stocks can serve as a strong cornerstone for your portfolio, offering stability and growth potential.
Why Do People Invest in Singapore Blue-Chip Stocks?
Singapore blue-chip Stocks are a popular investment choice for four main reasons:
- Established industry leaders
Blue-chip companies have a proven track record of stability, reliability, and performance, which adds a level of security to investments.
- Consistent and high dividends
They are able to reliably distribute competitive dividend payments to shareholders, which are attractive to income-focused investors.
- Resilience and consistent growth
These established companies are often those that have maintained steady growth of the past decade, which makes them an attractive option for investors seeking long-term investment opportunities.
The world is ever-changing, and these companies tend to be excellent at adapting to changing economic conditions. Additionally, they are also able to take advantage of the steady growth of Singapore as a global hub.
Singapore Exchange (SGX), renowned as one of Asia's esteemed stock exchanges, hosts a multitude of blue-chip companies. This association grants these blue-chip stocks an extra layer of reliability and openness. By investing in blue-chip stocks, individuals can partake in the progress of key sectors in Singapore's economy, encompassing banking, real estate, industrials, and more. Furthermore, these stocks present prospects for long-term capital growth and immediate income, rendering them a versatile asset for any investment portfolio.
5 Best Blue-Chip Stocks Singapore To Invest in With High Dividends
When it comes to long-term investments, blue-chip stocks remain an attractive option for many investors. Singapore's market offers a wide array of blue-chip stocks, and we have evaluated these companies primarily based on analyst ratings, macro economic trends, dividend rates, and long-term opportunity to identify the best blue-chip stocks to invest in.
However, it is important to note that not all of these companies were evaluated strictly based on the same metrics. Each company has its unique strength, which would allow investors of all types (long-term/short-term/high-risk/low-risk) to find something for them. Here is the list of the top five blue-chip stocks from Singapore with high dividends that you might consider adding to your portfolio:
DBS Group (SGX: D05)
DBS Group, the largest bank in Singapore, is a star performer in the financial sector. The bank's 2022 net profit hit a new record high of S$8.2 billion. Thanks to these robust results, DBS not only increased its quarterly dividend from S$0.36 to S$0.42, but also declared a special dividend of S$0.50.
DBS projects that its loan book will grow by mid-single-digits year on year, while fee income should rise by double within the same time period. With the bank's strong performance and growth prospects, DBS Group is a compelling choice for investors.
CapitaLand Ascendas REIT (A17U.SI)
CapitaLand Ascendas REIT, a key player in the real estate sector, has consistently delivered sound financial performance. The company has a market cap of approximately S$11.99 billion and an enterprise value of S$18.56 billion. With the upward trend in real estate prices over the past decade, CapitaLand Ascendas REIT has maintained strong profit margins of around 56.20%, and an operating margin of 64.18%.
In terms of dividends, the forward annual dividend yield stands at 5.15%, higher than the 5-year average of 4.00%. The company has seen a steady revenue growth of 7.10% year on year and manages a payout ratio of 86.47%. Despite a slight dip of 0.73% in its 52-week performance, the REIT's financials indicate a robust and sustainable yield for investors.
Seatrium Limited (S51.SI)
Seatrium Limited, an industrial conglomerate, boasts a significant market cap of S$16.78 billion, with an enterprise value of S$21.34 billion. Seatrium has maintained a strong profit margin of 25.96% and an operating margin of 31.57%. The company offers a forward annual dividend yield of 10.28%, backed by a payout ratio of 89.31%. Owing to Seatrium's revenue of S$2.15 billion coupled with its stable margins, Seatrium’s share price rose by 20.75% over the past 52 weeks, with further gains in sight.
Sembcorp Industries Ltd (SGX: U96)
Sembcorp Industries Ltd (SCI) is a provider of energy and urban solutions. In 2022, SCI's net profit more than tripled year on year in tandem with higher power prices. The company declared a special dividend of S$0.04, bringing the 2022 full-year dividend to S$0.12. With a recent long-term power purchase agreement with a unit of Micron Technology, SCI's earnings for 2023 are projected to increase, resulting in projected upward momentum for Sembcorp Industries Ltd’s share price.
Keppel Corp Ltd (SGX: BN4)
Keppel Corp Ltd is a key player in the offshore and marine sectors, and has demonstrated steady growth over the last decade. The company's share price increased from approximately S$7.00 to S$11.02 during this period, reflecting a compound annual growth rate (CAGR) of around 5.5%. Additionally, the company has announced a Vision 2030 plan that aims to allow Keppel to transition to a business model that covers Fund Management, Investment, and Operations. With its current Assets Under Management (AUM) at $50 billion and an ambitious goal to reach $200 billion AUM by 2030, Keppel Corp Ltd is certainly an excellent blue-chip stock poised for strong growth.
How Can I Buy Blue-Chip Stocks?
Buying blue-chip stocks in Singapore involves a few straightforward steps:
1. Open a Central Depository (CDP) Account
This is a necessary step for anyone interested in trading stocks on the Singapore Exchange (SGX). This account holds the shares you buy and records the shares you sell.
2. Open a brokerage account with a licensed securities firm
Your broker will execute trades on your behalf on the SGX. Once your accounts are set up, you can start buying blue-chip stocks. The key is to research and choose stocks that fit your investment goals and risk tolerance.
3. Regularly analyse your portfolio
Review your investment performance, rebalance your holdings if necessary, and always keep an eye on market trends and news affecting your stocks.
Final Tips about Blue-Chip Stocks
Blue-chip stocks in Singapore are an attractive investment option for their stability and potential for consistent, high dividends. Hence, they serve as excellent investments especially for those with a longer time horizon.
Nevertheless, it is important for you to remember to diversify your portfolio to protect yourself against unforeseen market downturns.
For instance, in addition to stocks, you can consider other types of investments such as index funds, bonds, exchange-traded funds, and alternative investments. Diversification can help you to mitigate risk and may potentially boost your overall returns.
If you are looking for other investment opportunities that can bring you up to 13.5%* returns per annum, consider Kilde, a platform that provides access to alternative investments into private debt.
Kilde offers attractive returns by connecting private credit investors with lending firms. This provides a unique way for you to diversify your portfolio beyond traditional stocks and bonds.
*KILDE PTE LTD (“Kilde”) is incorporated in Singapore (registration no. 201929587K) is licenced and regulated by the Monetary Authority Singapore and holds a Capital Markets Services Licence (CMS101016) and an Exempted Financial Advisor License under the Financial Adviser Act. The information provided in this marketing material is intended for “accredited investors” and “institutional investors” (collectively “qualified persons”) only. This marketing material, and any information in this marketing material, or any documentation that Kilde provides in relation to this marketing material is provided without any representation or any kind of warranties whatsoever (whether express or implied by law).
This advertisement has not been reviewed by the Monetary Authority of Singapore.