3 Blue-Chip Singapore Dividend Stocks to Buy in a Recession

Billy Toh

August 15, 2022

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Investing in the stock market hasn’t been easy this year for Singapore investors. That’s down to high inflation and rising interest rates.

However, investors who own dividend stocks can still enjoy the passive income that the dividends provide.

In fact, Singapore stocks that pay increasing dividends each year allow you to enjoy a larger flow of passive income over time. That’s a good thing in volatile and uncertain times.

Today, I’ll share three blue-chip Singapore stocks that have built up a track record of increasing their dividends consistently.

I believe these companies are reliable and resilient for investors who are building a diversified investment portfolio.

They’re also rock-solid companies that should be able to weather through a recession.

1. DBS Group

Singapore’s biggest bank – DBS Groups Holdings Limited (SGX: D05) – reported a stellar financial performance during H1 FY2022.

Net profit was up 7% year-on-year (yoy) to S$1.82 billion in Q2 FY2022, ahead of Bloomberg consensus expectations of S$1.64 billion.

DBS has benefitted from the rising interest rate environment with higher net interest income (NII).

The bank’s dividend per share (DPS) was maintained at 36 Singapore cents for the quarter. The 12-month forward dividend yield stands at an attractive level of 4.3%.

I’m not worried about its financial viability or its ability to continue paying dividends because the lender has been through multiple crises in the past.

On top of that, it has plenty of capital buffers for its dividend going forward. That’s evident by the improvement in its Common Equity Tier-1 (CET-1) ratio during the quarter.

2. Singapore Exchange

Singapore Exchange Limited (SGX: S68), or simply known as “SGX”, is Singapore’s sole stock exchange operator.

The bourse operator offers a comprehensive range of securities for investors and fund managers to invest into.

It has been a busy start to the year for SGX with the listing of three special purpose acquisition companies (SPACs).

The trio of SPAC listings in Singapore comes almost a year after debut SPACs in the US stalled on regulatory changes and poor returns that affected investor sentiment.

Singapore aims to become an Asian hub for SPAC listings, which are also sometimes known as blank-cheque firms.

Other exciting listings recently include the secondary listings from Nio Inc (SGX: NIO), a Chinese electric vehicle (EV) company.

SGX is currently trading with a 12-month forward dividend yield of 3.3%. It has also been paying a sustainable dividend and growing it over time.

Given SGX’s dominance as the sole stock exchange operator and its financial strength, I’m confident of its dividend safety and growth opportunities.

3. Mapletree Industrial Trust

Singapore investors who are looking for dividend stocks cannot overlook the real estate investment trusts (REITs) listed here.

Personally, I think Mapletree Industrial Trust (SGX: ME8U) is one of the most reliant and resilient REITs for dividend investors.

In fact, Mapletree Industrial has been one of the best-performing Singapore REITs that you could have owned over the last decade.

However, the higher property operating expenses and interest expense are expected to be among some of the challenges in the near term.

It is, however, worth noting that Mapletree Industrial’s balance sheet has remained strong despite of rising costs.

The REIT’s gearing ratio stood at a healthy level of 38.4% with a low average cost of debt of 2.5%.

The REIT also has a strong sponsor in Mapletree Investments Pte Ltd, and a solid track record of delivering consistent growth in distribution per unit (DPU).

At its current price, Mapletree Industrial is trading at an attractive 12-month forward dividend yield of 5.2%.

Building a resilient dividend portfolio

Everyone loves to own stocks that generate positive returns to their portfolio.

One of the best ways to do that is by building a resilient portfolio that pays out dividends through good times and bad.

Companies that have solid track records of increasing their dividend each year will also help you to ignore market volatility.

Given the slowing economic outlook and uncertainty in the near future, investors should take the opportunity to build a resilient dividend portfolio that can withstand a recession and market downturn.

Owning these three blue-chip Singapore stocks is a good way to start.

Disclaimer: ProsperUs Investment Coach Billy Toh doesn’t own shares of any companies mentioned.

 

About the Author: Billy Toh

Billy is passionate about the capital market and believes in investing for the long haul. Prior to this, he was an economist at RHB Investment Bank, covering Thailand and Philippines market. He also worked as a financial journalist at The Edge Malaysia and has experience working with an asset management firm. Aside from the capital market, Billy loves a good conversation over a cup of coffee, is a fitness enthusiast and a tech geek.