Blue-chip stocks are known for their reputation, track record and ability to weather good times and bad.
Investors buy blue-chip stocks to provide their portfolio with a solid buffer in difficult times.
The good news is that the majority of these stocks also pay a dividend.
Dividends are a source of passive income that you can use to supplement your earned income.
Here are four Singapore blue-chip stocks with a dividend yield of 5.6% or more.
OCBC Ltd (SGX: O39)
OCBC is Singapore’s second largest bank and offers a comprehensive range of banking, investment and insurance services.
The group reported excellent results for the first quarter of 2024 (1Q 2024).
Total income increased 8% year-on-year to S$3.6 billion, driven by a 4% year-on-year increase in net interest income (NII).
Net profit improved 5% year-on-year to a new record of S$1.98 billion.
The better performance was due to higher interest rates, which contributed to the increase in NII.
Last year, OCBC reported a sharp increase in total income of 20% year-on-year to S$13.5 billion, with loan volume increasing 1% year-on-year to S$297 billion.
The dividend for 2023 was S$0.82, up 21% from S$0.68 paid last year.
The lender’s shares offer a dividend yield of 5.8%.
CEO Helen Wong is confident about the coming year and expects OCBC to implement its strategic initiatives.
The bank recently launched a takeover offer for the remaining shares of Large Eastern Holdings (SGX: G07), which he does not own.
If successful, the acquisition will increase OCBC’s earnings and improve its return on equity.
United Overseas Bank Ltd (SGX:U11)
United Overseas Bank Ltd or UOB is Singapore’s third largest bank.
The lender also reported strong earnings for 2023 as high interest rates boosted its NII.
NII increased 16% year-on-year to S$9.7 billion, and fee income also increased 4% year-on-year.
As a result, total revenue increased 20% year-on-year to S$13.9 billion.
Operating profit and net profit for 2023 increased 24% and 25% year-on-year to S$8.2 billion and S$5.7 billion, respectively.
UOB has announced and paid a dividend of S$1.70 per share for 2023, compared to S$1.35 in the previous year.
The bank’s shares offer a dividend yield of 5.6%.
For the first quarter of 2024, UOB reported a slight decline in net profit but maintained its optimistic outlook.
The lender expects low single-digit loan growth and double-digit commission income growth in 2024.
Mapletree Industrial Trust (SGX:ME8U)
Mapletree Industrial Trust or MIT is an industrial REIT with a portfolio of 56 properties in the United States, 83 in Singapore and one in Japan.
The REIT’s assets under management (AUM) stood at S$8.9 billion as of March 31, 2024.
For the fiscal year 2024 (FY2024), ending 31 March 2024, gross revenue increased by 1.8% year-on-year to S$697.3 million.
Net property income (NPI) increased 0.6% year-on-year to S$521 million.
However, distribution per unit (DPU) decreased 1% year-on-year to S$0.1343.
MIT shares offer a distribution yield of 6.3%.
The REIT’s occupancy rate was high at 91.4% and a positive rental return rate of 6.6% was recorded for lease extensions.
MIT’s debt ratio was 38.7% and its average cost of debt was 3.1%.
Nearly 85% of the REIT’s loans are fixed-rate loans, which help it mitigate higher financing costs.
Frasers Logistics & Commercial Trust (SGX:BUOU)
Frasers Logistics & Commercial Trust (FLCT) owns a portfolio of 112 industrial and commercial properties valued at S$6.8 billion (as of March 31, 2024).
These properties are spread across Singapore, the Netherlands, Australia, the UK and Germany.
FLCT reported mixed results for the first half of its fiscal year 2024 (H1 FY2024), which ended March 31, 2024.
Revenue increased 3.9% year-on-year to S$216 million, while adjusted NPI increased 1.8% year-on-year to S$158.7 million.
However, DPU decreased 1.1% year-on-year to S$0.0348.
The annualized DPU for FLCT was S$0.0696, giving its shares a forward distribution yield of 7.3%.
The REIT reported healthy positive rent turnover of 14.2% and high portfolio occupancy of 94.3% for the last quarter.
Total debt remained low at 32.7% and FLCT had significant debt headroom of S$851 million before reaching the 40% debt limit.
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Disclosure: Royston Yang owns shares in Frasers Logistics & Commercial Trust and Mapletree Industrial Trust.
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