Father and his children with a laptop in front of them.

SINGAPORE: Blue-chip stocks are known to offer a solid foundation for any investor’s portfolio. Selecting the right ones can provide a pathway to long-term financial security, making them ideal assets to pass down to your children.

Here are three Singapore blue-chip stocks the next generation can still benefit from, according to The Smart Investor.

1. DBS Group

As Singapore’s largest bank by market capitalisation, DBS Group has established itself as a cornerstone of stability in the financial sector. Despite navigating various economic cycles, DBS has consistently demonstrated strength and resilience.

In 2023, the bank reported robust earnings propelled by a significant increase in net interest margins, thanks to surging interest rates. Total income climbed by 22% year-on-year to S$20.2 billion, with net profit reaching a record high of S$10.1 billion, marking a 23% increase from the previous year.

DBS declared a final dividend of S$0.54, a 26% increase from the previous year. Furthermore, a 1-for-10 bonus issue was announced, highlighting the company’s commitment to shareholder value.

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CEO Piyush Gupta remains optimistic about 2024. He expects sustained net interest margins and double-digit growth in fee income, supported by Taiwan’s acquisition of DBS’s Citigroup.

2. Singapore Exchange Limited

Singapore Exchange Limited (SGX) is Singapore’s sole stock exchange operator. In fiscal 2023, SGX reported a revenue increase of 8.7% year-on-year to S$1.2 billion and a 26.5% surge in net profit to S$570.9 million.

Excluding one-time items, net profit rose 10.3% year-on-year to S$503.2 million. The company’s commitment to shareholder returns was evident in its decision to raise quarterly dividends from S$0.08 to S$0.085.

Despite facing challenges in the first half of fiscal 2024, SGX remains focused on strengthening its global distribution capabilities and fostering deeper partnerships.

The company aims to sustain single-digit growth in dividend per share, aligning with its earnings trajectory.

3. Singapore Technologies Engineering Ltd

Singapore Technologies Engineering (STE) operates at the forefront of technology, defence, and engineering, serving customers worldwide.

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With nearly 50% ownership by Temasek Holdings, STE offers investors a dependable avenue for long-term growth.

In 2023, the company reported impressive financial results, with revenue rising by 11.8% year-on-year to S$10.1 billion. Operating profit saw a substantial increase of 24.4%, while net profit, excluding one-off items, would have grown by 24% to S$610 million.

In 2023, the company secured new contracts worth S$14.8 billion, boosting its order book to S$27.4 billion by December 31, 2023.

The final dividend for 2023 amounted to S$0.04, bringing the total dividends for the year to S$0.16. Notably, the TransCore acquisition has yielded positive earnings, while the Satcom sub-division undergoes transformational changes.

As STE continues to invest in building capabilities and expanding its market presence, it remains a strong choice for investors seeking stability and growth potential.

By carefully selecting companies with proven track records and strong fundamentals, investors can provide a more comfortable future for their children. /TISG

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This article is for educational purposes only. It should not be considered Financial or Legal Advice. Investors should conduct their own due diligence before making major financial decisions.

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