3 Top-Rated Stocks That Beat STI by a Wide Margin
Blue chip stocks are a great source of investment ideas for new investors.
These stocks are so named because they represent strong and stable companies with long track records.
The Straits Times Index (SGX: ^STI), or STI, contains 30 of the largest blue chip stocks on the Singapore Stock Exchange.
As of June 15, 2022, the index showed a slight negative return of -0.57%.
If you were to dig deeper into the stocks of the constituents of the benchmark, you would see that some performed significantly better while others did worse.
Here are three top stocks that have largely beaten the STI and may have more room to maneuver.
Sembcorp Industries Ltd (SGX: U96)
Sembcorp Industries Ltd, or SCI, is a leading provider of energy and city solutions.
The group has an energy portfolio of more than 15 gigawatts (GW), including more than 4.5 GW of renewable energies such as solar and wind energy.
Shares of the energy group have jumped 39.3% since the start of the year, easily beating the STI.
SCI announced a windfall profit package for fiscal 2021 (FY2021), with revenue up 43% year-on-year to S$7.8 billion and net profit up 78% year-on-year to reach S$279 million.
For fiscal year 2021, the group secured 2.9 GW of new renewable energy projects in its key markets.
SCI recently announced the completion of the acquisition of a 98% interest in a portfolio of operational wind and solar assets in China.
This purchase increased its gross renewable energy portfolio to 6.8 GW.
The group is on track to meet its target of 10GW of installed renewable energy capacity by 2025, as part of its three-pronged business transformation announced in mid-June last year.
Meanwhile, SCI has also been appointed by the Energy Market Authority to build, own and operate energy storage systems on Jurong Island.
Keppel Corporation Limited (SGX: BN4)
Keppel Corporation is a provider of sustainable urbanization solutions with four key divisions: energy and environment, urban development, connectivity and asset management.
The group’s share price has performed well since the start of the year, returning 29.2% before taking dividends into account.
Keppel had announced its highest net profit in six years of S$1.02 billion for the 2021 financial year, reversing the S$506 million loss a year ago.
A total dividend of S$0.33 per share was also paid and a S$500 million share buyback program was initiated.
The conglomerate continues to make good progress on its Vision 2030 goals, as it has reported good progress in monetizing its assets.
Over S$3.2 billion has been monetized from October 2020 to the end of March 2022, with S$17.5 billion in monetizable assets across the group.
Keppel Corporation also increased its recurring revenue by 33% year-on-year for FY2021, from S$220 million to S$292 million.
The momentum continued in the first quarter of 2022 (1Q2022), with revenues up 9% year-on-year to reach S$2.1 billion.
Investors can also look forward to the upcoming merger between Keppel’s Offshore and Marine (O&M) division and Sembecorp Marine Ltd (SGX: S51) which will create a stronger global player in the O&M sector.
City Developments Limited (SGX: C09)
City Developments Limited, or CDL, is a global real estate company that operates in 104 locations in 29 countries and regions.
The group owns and manages a portfolio of residential, hotel and investment properties around the world.
CDL’s share price has outperformed STI with a 17.3% increase year-to-date.
The real estate giant reported improved revenue for fiscal 2021, with revenue up 24.5% year-on-year to S$2.63 billion.
The best performance came after the group sold its 51% stake in troubled Sincere China for US$1 last September.
It also paid a total dividend of S$0.12 per share for the 2021 financial year.
For the 1Q2022 trade update, CDL reported that market activity in Singapore is expected to improve with new launches to come.
Construction activities are also picking up with the reopening of the country as labor issues now ease.
CDL’s hotel business is also seeing signs of improvement, with room occupancy reaching 52.2% in 1Q2022 from 36.8% a year ago.
Revenue per available room (RevPAR) also more than doubled, from S$44.4 in 1Q2021 to S$89.6 in 1Q2022.
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Disclaimer: Royston Yang does not hold any shares in any of the companies mentioned.