4 Solid Singapore Blue-Chip Stocks Suitable for Retirees
Retirement is a blissful period where we can enjoy our golden years in comfort and happiness.
One aspect you should remember, though, is that you no longer draw any income from a salary after you stop working.
Hence, the ideal scenario is to fund your retirement using a stream of passive income such as dividends.
Retirees also need to ensure that they protect their pot of gold as they will rely on it for daily and emergency expenses.
To this end, blue-chip companies can provide the stability and certainty that this group of investors seek.
Here are four dependable blue-chip stocks that not only pay out regular dividends but can also offer you a good night’s sleep.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator and enjoys a natural monopoly.
SGX has been a stalwart all these years and the group has been paying dividends consistently since fiscal 2001 (FY2001).
For its FY2022 earnings ending 30 June 2022, SGX saw its revenue scale a new high of S$1.1 billion, up 4% year on year.
Net profit inched up 1% year on year to S$451 million.
SGX also paid out a dividend of S$0.32 for FY2022, giving its shares a trailing dividend yield of 3.5%.
For FY2023, SGX expects its capital expenditure to be between S$70 million to S$75 million as it spends to enhance its platform and system architecture.
Its foreign exchange over-the-counter division has also grown, contributing around 5% to the group’s revenue for FY2022.
The bourse operator will release its FY2023 first-half results on 9 February 2023, and investors can look forward to yet another quarterly dividend.
United Overseas Bank Ltd (SGX: U11)
United Overseas Bank Ltd, or UOB, is one of Singapore’s three big local banks.
The bank has been a bastion of strength throughout the pandemic when it reported a net profit of S$4 billion for FY2021.
The lender is also riding high on surging interest rates to report a 39% year on year surge in its net interest income (NII) for the third quarter of fiscal 2022 (3Q2022).
In line with its strong results, UOB paid out an interim dividend of S$0.60 this year.
Together with its S$0.60 final dividend in FY2021, the trailing 12-month dividend came up to S$1.20, giving its shares a trailing 12-month dividend yield of 4%.
The US Federal Reserve is expected to continue hiking interest rates in 2023, though at a slower pace.
UOB should benefit from these higher rates that will boost its NII.
The bank has also completed its acquisition of Citigroup’s (NYSE: C) consumer banking businesses in Malaysia and Thailand.
Slightly more than a year ago, UOB announced a S$5 billion purchase of the US bank’s consumer banking division in four countries.
For Vietnam and Indonesia, management believes that the acquisition can close by the end of this year.
Singapore Technologies Engineering Ltd (SGX: S63)
Singapore Technologies Engineering, or STE, is an engineering and technology conglomerate serving the aerospace, smart city, and defence sectors.
This stalwart has been steadily growing its order book over the past three years.
STE’s order book has grown from S$15.3 billion in FY2019 to S$25 billion at the end of September 2022.
In 3Q2022 alone, the engineering giant clinched S$4.8 billion of new contracts across the commercial aerospace and public security segments.
It also declared and paid out a quarterly dividend of S$0.04, bringing its annualised dividend per share to S$0.16.
Shares of STE offer a forward dividend yield of 4.3%.
Elsewhere, the group also clinched a US$1.07 billion contract to modernise toll collection systems in New Jersey, USA.
CapitaLand Investment Limited (SGX: 9CI)
CapitaLand Investment Limited, or CLI, is a real estate investment manager (REIM) with around S$130 billion of assets under management (AUM) and about S$86 billion of funds under management (FUM) as of 30 September 2022.
The REIM has been growing its fee-related earnings (FRE) for the first nine months of 2022 (9M2022).
FRE grew by 19% year on year to S$339 million for 9M2022.
CLI’s lodging division also enjoyed a strong recovery as borders reopened, posting FRE of S$190 million, up 48% year on year.
The group also grew the number of units in its lodging portfolio by 20% year on year to 155,000 units.
CLI paid out a total dividend of S$0.15 for FY2021, giving its shares a historical dividend yield of 3.8%.
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Disclosure: Royston Yang owns shares of Singapore Exchange Limited.
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