4 Singapore Blue-Chips with the potential to increase their dividends

Keppel DC Reit

Every investor likes to receive a dividend.

Even more so when that dividend increases steadily, as it means you receive a larger stream of passive income over time.

The past few months have seen heightened stock market volatility, with investors reacting to a combination of high inflation and soaring interest rates.

There are also rumors of a potential economic downturn, Prime Minister Lee Hsien Loong has warned that Singapore could face a recession next year or in 2024.

During tough times, owning a blue chip stock mix will provide stability and peace of mind.

The surprising fact is that several blue chip companies are posting better earnings despite dark clouds looming on the horizon.

Here are four that have the potential to boost their dividends once they report their fiscal 2022 (fiscal 2022) results in February next year.

DBS Group (SGX: D05)

DBS Group is Singapore’s largest bank and offers a full range of retail and corporate banking services.

The lender recently announced a stellar set of income for the third quarter of its fiscal year 2022 (3Q2022), with net profit reaching a record high of S$2.2 billion.

The better performance was driven by a sharp rise in interest rates which helped push the bank’s net interest margin (NIM) up to 1.9% in 3Q2022 from 1.58% in the prior quarter.

DBS predicts the NIM could rise further to 2.25% by the middle of next year as the US central bank continues to raise benchmark rates to fight inflation.

The bank has a history of increasing its dividends over the years.

In fiscal year 2016, it paid a total dividend of S$0.60 per share.

In fiscal 2019, it had more than doubled its annual dividend to $1.23.

DBS saw its dividends plummet in 2020 after the Monetary Authority of Singapore ordered banks to hold on to capital in light of the pandemic.

Subsequently, in 2Q2021, the lender reinstated its quarterly dividend of S$0.33, but then increased it to S$0.36 in 4Q2021 and maintained it for another three quarters.

If its financial numbers continue to shine, investors could see DBS raise its dividend again.

OCBC Ltd (SGX: O39)

OCBC is Singapore’s second largest bank and, like DBS, also reported a robust set of financial figures for 3Q2022.

Net profit hit a record S$1.6 billion for the quarter as OCBC benefited from both loan growth and an increase in NIM.

The bank’s NIM reached 2.06%, up sharply from the 1.54% recorded in 3Q2021.

Like DBS, it expects its fourth-quarter NIM to top 2.1%, bringing higher levels of net interest income.

OCBC has steadily increased its final dividend since fiscal 2017, when it went from S$0.18 to S$0.19. The rise continued until fiscal 2019, when the lender paid a final dividend of $0.28.

Similar to DBS, dividends were also cut in 2020, but once dividend restrictions were lifted, the bank restored its final dividend to S$0.28 last year.

Investors could see a higher final dividend from OCBC if the NIM stays high and the bank posts healthy earnings again.

Venture Corporation Limited (SGX: V03)

Venture provides products, services and technology solutions to a wide variety of customers in various industries.

The group has a portfolio of over 5,000 products and employs over 12,000 people worldwide.

Venture reported strong 3Q2022 figures, with revenue up 32.8% YoY to S$1 billion and net profit up 26.4% YoY to 97 .4 million Singapore dollars.

For the first nine months of 2022 (9M2022), net profit improved by nearly 25% year-on-year to reach S$271.7 million.

If this strong performance continues, the technology group could declare a higher final dividend for fiscal 2022.

Keppel Corporation Limited (SGX: BN4)

Keppel is a conglomerate made up of four main divisions: energy and environment, urban development, connectivity and asset management.

The group recorded a 24% increase in revenue year-on-year to S$6.8 billion for the 9 months of 2022, with increases in all divisions except urban development.

Keppel also advanced on its asset monetization plan for its Vision 2030 targets, with S$4.4 billion in monetized assets, including S$1.4 billion realized in 9M2022.

In addition, the group also recorded its highest net order book for its offshore and marine division since 2007.

Its backlog more than doubled from S$5.1 billion at the end of 2021 to S$11.6 billion as of September 30, 2022.

The group had already increased its interim dividend to S$0.15 from S$0.12 a year ago, so there is a good chance it could pay a higher final dividend if its strong performance continues. .

In our FREE special report, Top 9 Dividend Stocks for 2022and 3 tactical changes to maximize your profitswe reveal 3 special classes of stocks that are poised to generate maximum growth in 2022 and beyond.

Our safe haven stocks are a collection of top-notch companies that have held their own and paid regular dividends. Growth Accelerator Actions are enterprising companies ready to continue to grow. And finally, the pandemic surprises are the unexpected winners of the pandemic.

Download for free to find out what our safe haven stocks, growth accelerators and pandemic winners are! CLICK HERE to discover now!

follow us on Facebook and Telegram for the latest investing news and analysis!

Disclaimer: Royston Yang owns shares of DBS Group.

The post office 4 Singapore Blue-Chips with the potential to increase their dividends appeared first on The smart investor.

Comments are closed.