Investors love blue-chip stocks for their reliability as these companies have a track record of going through good times and bad.
Although these businesses may suffer from a temporary dip in their fortunes, their size and resilience always allow them to bounce back even stronger.
As a bonus, most blue-chip stocks also dish out a dividend.
We highlight three blue-chip stocks that recently raised their dividends and boast good prospects for further growth.
United Overseas Bank (SGX: U11)
United Overseas Bank, or UOB, is the third-largest bank within the trio of local banks.
The lender recently released an impressive set of financial results for its fiscal 2023 first half (1H 2023).
Net interest income (NII) surged by 37% year on year to S$4.8 billion in tandem with the rise in interest rates.
As a result, total income jumped 40% year on year to S$7.1 billion for 1H 2023.
Core net profit, excluding the integration expenses related to UOB’s purchase of Citigroup (NYSE: C) consumer banking business, climbed 53% year on year to S$3.1 billion.
The bank hiked its interim dividend from S$0.60 in 1H 2022 to S$0.85 in 1H 2023.
The outlook for 2023 remains bright as UOB expects low to mid-single-digit year-on-year loan growth and for net interest margins to stay high.
Fee income is also projected to grow by high single digits year on year.
For its Citigroup acquisition, UOB is on track to achieve an annualised revenue uplift of around S$1 billion in the four markets of Indonesia, Malaysia, Thailand, and Vietnam for 2023.
The integration is proceeding well in Malaysia, Thailand, and Vietnam, and for Indonesia, the acquisition is expected to conclude by the end of this year.
Sembcorp Industries Ltd (SGX: U96)
Sembcorp Industries Ltd, or SCI, is an energy and urban solutions provider.
The group boasts a balanced energy portfolio of 19.4 GW with 11.9 GW comprising wind, solar, and energy storage.
For its urban development portfolio, SCI has a project portfolio spanning 13,000 hectares across Asia.
The blue-chip utility group posted a mixed set of earnings for 1H 2023 with revenue dipping by 6% year on year to S$3.7 billion.
The group’s net profit excluding exceptional items surged 55% year on year to S$602 million.
SCI’s interim dividend was raised from S$0.04 a year ago to S$0.05.
Prospects look bright for the group as it continues to grow its gross renewables capacity to 11.9 GW.
Its Integrated Urban Solutions division also saw land sales more than double year on year to 85 hectares.
The group also improved the earnings visibility for its Conventional Energy segment by signing long-term power purchase contracts with Micron Technology (NASDAQ: MU) and Singtel (SGX: Z74).
Recently, SCI also signed a non-binding term sheet for a gas sales agreement while also deepening its ties in Vietnam with the addition of four new Vietnam-Singapore Industrial Parks under its belt.
DFI Retail Group (SGX: D01)
DFI Retail Group is a pan-Asian retailer operating in 13 countries with over 10,700 outlets in different formats such as hypermarkets, supermarkets, convenience stores, and health and beauty stores.
The group reported a turnaround in its business for 1H 2023.
Although revenue stayed flat year on year at US$4.6 billion, the retailer generated an underlying net profit of US$33 million.
Because of the better performance, the interim dividend was tripled year on year from US$0.01 to US$0.03.
There could be more good news as China and Hong Kong reopen earlier this year.
DFI Group’s Convenience division saw better like-for-like sales in 1H 2023 driven by foot traffic recovery and increased promotional activity.
The Health and Beauty division saw a 20% like-for-like sales growth increase in 1H 2023, with Mannings Hong Kong seeing sales accelerate in the second quarter.
The sale of DFI Retail Group’s Malaysia grocery retail business was completed in March 2023 and the retailer also plans to sell several properties in Malaysia in 2H 2023.
Chairman Ben Keswick is encouraged by the pace of recovery driven by the reopening of Hong Kong amid a continued recovery in Southeast Asian markets.
He is confident that the group is well-positioned for growth in the remainder of 2023 and beyond.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
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