A Guide to The Best Blue Chip Stocks Investment in Singapore

Blue chip stocks refer to large, reputable and financially sound companies listed on the stock market. These companies are often market leaders dominating their industries, and have been around for many years. They are a popular choice among investors seeking stability, steady dividends and lower risk in their portfolios.

Here’s what you need to know about investing in blue chip stocks:

Blue chip stocks are shares of well-established, financially stable companies with a proven track record of success. These top companies often dominate their industries, enjoy widespread name recognition, and are considered reliable investments due to their consistent performance. Some of the common characteristics that they share include:

• Large market capitalisation: Blue chip stocks usually come from large-cap companies with a market valuation of US$10 billion or more, reflecting their size and value in the market.

• Long track record of growth: These companies have a proven history of steady growth and profitability. While they may not deliver rapid gains like newer or smaller companies, their established nature offers reliability and stability for investors.

• Part of major market indexes: Blue chip stocks are often included in major stock indexes like the S&P 500, Dow Jones Industrial Average, or Nasdaq 100, showcasing their significance in the market. In Singapore, familiar names such as DBS, Dairy Farm, and CapitaLand come to mind. These companies are also part of the Straits Times Index (STI), which tracks the 30 largest companies listed on the Singapore Exchange (SGX).

• Dividend payments: Many blue chip stocks provide dividends, which are regular payments to shareholders from the company’s revenue. This makes them an appealing option for those looking for a steady passive income stream. However, not all blue chip stocks pay dividends.

If you're new to investing and want to learn how to buy shares in Singapore, check out our detailed guide How to Buy Shares in Singapore.

*Data as of 1st Nov 2024

The blue chip stocks in the USA are hugely popular companies that even the average Singaporean will recognise, such as Apple, Coca-Cola, Johnson & Johnson, Microsoft, Nike and Wal-Mart. 

Here in Singapore, the three local banks and Real Estate Investment Trusts (REITs) are the heavyweights. Here are some of our best known blue chip stocks on the SGX.

DBS, OCBC and UOB are known as the big three banks in Singapore. They also happen to be the only banks you can open a Supplementary Retirement Scheme (SRS) account with. Amongst the three, DBS was named the ‘World’s Best Bank’ for three years running, and is the most expensive in terms of stock price. Here’s why DBS stands out as a strong blue-chip investment:

• Solid financial performance

DBS reported a 12% year-on-year increase in net profit to S$8.8 billion for 9M 2024, with total income rising 11% to S$16.8 billion, driven by higher net interest and non-interest income.

• Attractive dividends

The bank raised its interim dividend by 22% to S$0.54 per share in 2024, with a forward annualised dividend of S$2.16 per share and projected yields of 7% by 2025.

• Growth in wealth management

Wealth Management income grew 37% year-on-year to S$518 million, with assets under management reaching S$396 billion, a 24% increase.

• Digital and regional leadership

Renowned for its digital banking innovations, DBS operates in 18 markets, enhancing customer experience and expanding its regional presence.

• Optimistic outlook

Despite challenges, DBS expects positive loan growth in 2025, maintaining its strong position in the market.

DBS’s financial strength, competitive dividends, and innovative edge make it a top blue-chip stock for investors. If you want in on the regular dividends given by our local banks, read more here.

Singapore Airlines (SIA), Singapore’s flagship carrier, is renowned globally for its exceptional service and innovation. Operating under a dual-brand strategy, SIA caters to both premium and budget-conscious travelers through its mainline operations and Scoot, its low-cost subsidiary. Additionally, SIA owns the SIA Engineering Company, a leader in maintenance, repair, and overhaul (MRO) services, further reinforcing its operational excellence. Here’s why it’s a strong investment option: 

• Market leadership in Asia’s aviation hub

Leveraging Singapore's strategic position as a major transit hub, SIA benefits from significant regional and international transit traffic. With a vast network covering 125 destinations globally, SIA has a competitive edge in capturing market share in the Asia-Pacific region, known for its dynamic aviation growth.

• Financial resilience and operational strength

SIA’s solid financial footing has allowed it to navigate challenges such as rising fuel costs and high inflation. SIA also quickly restored its operational capacity to around 98% of pre-pandemic levels, strengthening its market presence.

• Strategic growth and partnerships

SIA continues to expand its global reach through partnerships and investments. The pending merger with Air India and Vistara will grant SIA a 25.1% stake in the combined entity, enhancing its foothold in the fast-growing Indian market. Collaborations with Garuda Indonesia and Riyadh Air further expand its connectivity and network options for passengers.

• Commitment to sustainability

SIA is a frontrunner in sustainability initiatives, including its partnership with Cathay Pacific to promote sustainable aviation fuel (SAF) adoption in Asia-Pacific. These efforts align with its goal of achieving net-zero carbon emissions by 2050, showcasing its dedication to eco-friendly practices in the aviation industry.

Read our full guide to SIA shares here.

CapitaLand is one of the biggest real estate investment trusts (REITs) in Asia with presence in more than 30 countries. They own integrated developments, retail, office, lodging, residential and other sectors including business parks, industrial, logistics and data centres. 

Here in Singapore, CapitaLand owns some of the most iconic malls around, including Bugis Junction, Funan Mall, Raffles City, and Plaza Singapura. This is why we think CICT is a strong investment option:

• Dominant market position

As Singapore’s largest integrated commercial REIT, CICT derives over 90% of its revenue from the local market. This strong positioning offers resilience against global economic uncertainties while capturing growth opportunities in Singapore’s retail and office sectors.

• Steady growth potential

CICT enjoys high occupancy rates and consistent positive rent reversions, providing a stable foundation for organic growth. Additionally, it has access to a sponsor pipeline of prime commercial assets, positioning it for strategic acquisitions that enhance its portfolio.

• Upside from tourism recovery

The recovery of tourism, particularly the return of Chinese tourists, is expected to boost retail foot traffic and tenant sales in CICT’s properties. This trend could lead to increased occupancy rates and rental growth, contributing to higher revenue.

You can read more about investing in REITs here.

Which mobile plan are you using? Much like our local banks, Singaporeans will also know Singtel, M1 and Starhub as the leaders in the telco space. Singtel is building up its 5G capacity and is on track to roll out its 5G network coverage nationwide by 2025. With its ambitious strategies and regional presence, Singtel remains a strong contender in the blue-chip space.

• Growth-driven strategy through ST28

Singtel’s "ST28" initiative outlines a focused approach to growth, with significant investments in 5G expansion, data centres, and enhanced regional connectivity. The company’s commitment to rolling out nationwide 5G network coverage by 2025 reflects its ambition to stay at the forefront of the telecommunications industry.

• Expanding digital infrastructure and ICT

Through its subsidiaries NCS and Nxera, Singtel is rapidly scaling its digital infrastructure and data center segments. The company has increased its data centre capacity from 62MW to 155MW across Singapore, Thailand, and Indonesia, capitalising on the rising demand for digital solutions in Southeast Asia.

• Strong regional presence

Singtel’s strategic stakes in regional associates such as AIS, Globe Telecom, and Telkomsel position it for significant growth in key markets. These partnerships offer opportunities for expanding its influence and revenue in fast-growing regions.

• Improved dividends and financial stability

Singtel recently introduced a value-realisation dividend of 3-6 cents per share, alongside a core dividend payout ratio of 70%-90% of its underlying net profit. Additionally, the company reduced its net debt by 7% to S$7.78 billion, highlighting its commitment to improving financial stability and rewarding shareholders.

• Resilient in a volatile market

With a focus on operational efficiency and diversification into digital services, Singtel is well-equipped to navigate challenges in the competitive telco market. Its investment in data centers and digital services aligns with growing regional demand, strengthening its resilience and market position.

Read all about Singtel and its dividend payouts here.

Sheng Siong, one of Singapore's leading supermarket chains, has built a reputation for resilience and growth, making it an appealing choice for investors seeking stable returns. Its focus on operational efficiency, strategic expansion, and cost management has strengthened its position in the competitive retail market.

• Strong supply chain and proven bidding success
  

Sheng Siong’s robust supply chain management and ability to secure prime retail locations have been key drivers of its success. Over the past five years, the company has won many HDB store tenders, steadily increasing its presence across Singapore. By optimising its procurement strategies, Sheng Siong maintains competitive pricing, appealing to value-conscious customers while protecting its margins.

• Consistent earnings growth and expansion opportunities
  

Looking ahead to FY2025, Sheng Siong is expected to deliver a 5% net profit increase, driven by continued store expansion and efficient margin management.

With competitor consolidations in the sector and pending HDB tenders, Sheng Siong is well-positioned to capitalise on new growth opportunities, ensuring its sustained performance in the years to come.

OCBC, Singapore’s second-largest bank, is a key player in Southeast Asia and Greater China, offering a well-rounded business portfolio spanning banking, wealth management, and insurance through its subsidiary, Great Eastern Holdings.

• Strong financial performance

In Q3 2024, OCBC delivered a robust net profit of S$1.97 billion, marking a 9% increase in the same period in 2023. On an annualised basis, return on equity rose to 14.1%, while earnings per share increased to S$1.73. Customer loans grew by 4% year-on-year on a constant-currency basis, reflecting strong customer acquisition and lending performance. 

• Attractive dividend growth

OCBC declared an interim dividend of S$0.44 per share for H1 2024, reflecting a 10% increase from the previous year. With a TTM dividend yield of 5.61% and a consistent payout ratio of 50%, the bank remains appealing to income-focused investors.

• Diversified revenue streams

The bank’s strong non-interest income performance, driven by its wealth management and insurance segments, underscores its diversified revenue base. Wealth management assets under management (AUM) reached a record high of S$279 billion, reinforcing OCBC’s competitive edge.

• Solid risk management

OCBC’s non-performing loan (NPL) ratio improved to 0.9%, down from 1.1% the previous year. Total allowances decreased by 43% to S$144 million, reflecting the bank’s prudent risk management and enhanced asset quality.

OCBC’s consistent growth, strong dividend payouts, and diversified business model make it a compelling blue-chip investment option for long-term investors.

UOB, Singapore’s third-largest bank, is a prominent financial institution in Southeast Asia, recognised for its growing wealth management capabilities and regional expansion efforts.

• Resilient financial results

In Q3 2024, UOB delivered a net profit of S$1.61 billion, exceeding market estimates of S$1.50 billion. The bank achieved new records in net fee income, trading income, and investment income, underscoring its ability to navigate market conditions effectively. Although the net interest margin dipped slightly to 2.05%, it remained stable, reflecting prudent management amid fluctuating interest rates.

• Strong growth in wealth management and fee income

Net fee income surged to a record high, driven by robust growth in loan-related, wealth management, and credit card fees. Wealth management income saw a significant 40% year-on-year increase, with assets under management (AUM) reaching S$182 billion, a 10% rise. This highlights UOB’s successful efforts in capitalising on rising consumer wealth in Southeast Asia.

• Consistent asset quality

UOB maintained strong asset quality with a non-performing loan (NPL) ratio of 1.5%, supported by a solid coverage ratio. The bank’s prudent risk management approach has ensured resilience in its loan portfolio, contributing to its stable performance.

• Regional expansion and integration

UOB has successfully integrated Citigroup’s retail operations in Malaysia, Indonesia, and Thailand, with Vietnam integration set for 2025. These expansions enhance cross-selling opportunities and strengthen UOB’s regional footprint.

CapitaLand Ascendas REIT (CLAR) stands as Singapore's first and largest industrial real estate investment trust (REIT), managing a diversified portfolio of 229 properties across Singapore, the US, Australia, the UK, and Europe. With a robust asset base valued at S$16.8 billion as of June 2024, CLAR offers a strong foundation for investors seeking stable returns and growth opportunities.

• Market leadership and diversified portfolio

As the oldest industrial REIT in Singapore, CLAR holds a leading position in the market. Its broad portfolio spans industrial, business parks, and logistics properties, offering diversification across multiple sectors and geographies.

• Stable occupancy and rental growth

With a high portfolio occupancy rate of 92.1% as of Q3 2024 and a strong positive rental reversion of 14.4%, CLAR ensures steady rental income for investors.

• Growth through acquisitions and redevelopments

The REIT actively engages in capital recycling, demonstrated by the sale of a logistics property in Singapore for S$112.8 million. It is also investing S$572.6 million in six redevelopment and refurbishment projects to enhance asset returns.

Keppel Corporation is a global leader in asset management and sustainable urbanisation, specialising in real estate, infrastructure, connectivity, and alternative assets. With its diverse business model and focus on green and digital solutions, Keppel is well-positioned to capitalise on the growing demand for sustainable investments.

• Asset-light strategy and stable income

Keppel’s transition to an asset-light model has enhanced its financial stability, focusing on recurring income streams like asset management fees. Recurring income grew 14% year-on-year in the first nine months of 2024, reflecting this strategic shift.

• Expansion in digital and green infrastructure

Keppel is scaling up its data centre capacity from 650 MW to 1.2 GW and doubling Singapore’s power supply to 3 GW by 2030. These initiatives align with global trends in digitalisation and sustainability, positioning Keppel as a leader in these high-demand sectors.

• Strong financial management

Keppel’s disciplined approach to asset monetisation has resulted in approximately S$6.1 billion in divestments since 2020, with S$730 million generated year-to-date in 2024. This strategy enhances its capital efficiency and shareholder value.

• Commitment to ESG principles

Keppel’s AAA MSCI rating since 2020 underscores its commitment to environmental, social, and governance (ESG) standards, making it an appealing choice for investors prioritising sustainability.

Singapore Technologies Engineering (ST Engineering) is a globally integrated engineering powerhouse with operations spanning aerospace, defence, public security, and urban solutions. Known for its innovative approach, the company addresses the evolving demands of modern cities and defence sectors.

• Resilient order book and revenue visibility

ST Engineering boasts a record order book of S$27.9 billion, providing strong revenue visibility and mitigating market volatility. 

• High-growth market focus

The company’s strategic focus on urban mobility, smart cities, and digital technologies positions it to benefit from rising global demand for sustainable urban solutions and advanced security systems. Key initiatives include contracts in rail systems, intelligent transportation, and smart utilities.

• Diverse and growing business segments

ST Engineering reported a 14% year-on-year increase in revenue to S$5.52 billion for 1H 2024. Its commercial aerospace segment saw robust demand for MRO services, while its defence and urban solutions segments continued to expand, securing S$6.1 billion in new contracts in 1H 2024.

• Innovative expansion and M&A strategy

The company’s focus on digital transformation, including AI, cloud services, and cybersecurity, complements its established engineering expertise. Strategic acquisitions and partnerships further bolster its portfolio, blending stability with growth opportunities.

Disclaimer: 

Please note that SingSaver is not responsible for any investment outcomes. The information provided in this guide is intended solely to help you make informed decisions. We strongly recommend conducting thorough research or consulting with a licensed financial advisor before making any investment decisions. Investing involves risks, and it’s essential to ensure your choices align with your financial goals and risk tolerance.

Also, read about the top blue chip stocks in 2021 and 2022. 

Blue chip stocks are known for rewarding their investors with attractive dividends, year after year. Whether it’s for a comfortable retirement, financial independence, or other individual goals, investors looking to build a steady income stream by investing in dividends could find blue chip stocks to be a good choice to add to their portfolios.

The long history of these big companies instills confidence in investors that the company can weather future storms, much like how they’ve weathered tumultuous times of the past like the Asian Financial Crisis and the Great Recession. The size and financial stability of the company also play a part — rough seas can batter even the sturdiest of ships, let alone a small dinghy.

Diversification helps to ensure that your portfolio is not overly exposed to a single stock, geography, industry, or asset class. If you’re an investor that prefers to invest in US stocks, that does not render Singapore blue chips irrelevant. There’s still a good reason to include Singapore blue chips into your portfolio, to collect dividends and to keep your eggs spread across multiple baskets.

All investments come with a degree of risk. However, some are riskier than others. Some have unproven business models, while some are young companies looking to topple the goliath. Blue chip stocks, however, have proven their mettle over the years, emerging stronger from market downturns and rewarding investors with steady dividends.

It’s worth noting that no sector or company is infallible or immune to market volatility. For example, no one could have predicted an event like COVID-19 could bring the entire aviation and travel sector to its knees in 2020.