3 Singapore Blue-Chip Stocks Hitting New 52-Week Highs. Are They A Buy?

What happened?

Singapore's stock market is on a roll. 

The bellwether Straits Times Index (STI) hit a 17-year high of 3,744 recently and is up more than 15% year-to-date.

Last week, I shared three Singapore REITs that raised their dividends recently despite headwinds from higher interest rates. 

What I noticed is that the share prices of several blue-chip stocks have recently reached new 52-week highs.

In this post, I will dive into what is driving the strength in three Singapore blue chip stocks - DBS, SGX and ST Engineering. 

3 Singapore blue chips touching their year-highs

Here are three blue-chip stocks that recently touched their 52-week high and their recent results, business developments, and prospects.

#1 – DBS Group

DBS is Singapore’s largest bank by market capitalisation and offers a comprehensive range of banking, insurance, and investment services to both individuals and corporations.

The lender’s shares recently hit a 52-week high of S$43.02 and have shot up more than 42% year-to-date.

DBS reported a strong set of earnings for the third quarter and first nine months of 2024 (3Q 2024 and 9M 2024). 

Total income for 3Q 2024 jumped 11% year on year to S$5.8 billion with net interest income posting a 3% year-on-year increase to S$3.8 billion.

The bank also saw a sharp 32% year-on-year increase in fee and commission income which helped to grow its total income for the quarter.

Net profit for 3Q 2024 came in at S$3.03 billion, the first time that quarterly net profit has crossed the S$3 billion market.

For 9M 2024, total income climbed 11% year on year to S$16.8 billion while net profit increased by 12% year on year to S$8.8 billion, also a record high for the lender.

An interim dividend of S$0.54 was declared for 3Q 2024, representing a nearly 23% year-on-year increase over the prior year’s S$0.44.

In addition, DBS also announced the establishment of a S$3 billion share buyback programme (see below).

For the first time, DBS will purchase shares in the open market and then cancel them, thereby reducing the bank’s outstanding issued share capital.

By doing so, the programme will help to provide a performance uplift to earnings per share and return on equity.

DBS is exploring share buybacks as an additional way of rewarding shareholders in addition to higher ordinary dividends and the occasional special dividends.

CEO Piyush Gupta is optimistic that the group’s net interest income for 2025 will remain around 2024 levels.

Lower net interest margins should be offset by higher loan growth as interest rates decline.

Non-interest income is also expected to climb by high-single digits year on year. 

Read our analysis of DBS earnings and share buybacks here. 

Find out how much dividends DBS is expected to pay in the coming year based on current market forecasts. 

Related Links:

• DBS Group share price history and share price target
• DBS Group dividend history and dividend payment dates

#2 – Singapore Exchange Limited

Singapore Exchange Limited is Singapore’s sole bourse operator and operates a platform for the buying and selling of securities such as shares, bonds, derivatives, and exchange-traded funds.

SGX’s share price hit its 52-week high of S$12.20 recently and is up 24.6% year-to-date.

The bourse operator announced a strong set of earnings for its fiscal 2024 (FY2024) ending 30 June 2024 and also upped its quarterly dividend.

Revenue increased by 3.1% year on year to S$1.2 billion while net profit rose 4.7% year on year to S$597.5 million.

Excluding exceptional and one-off items, SGX’s net profit would have increased by 4.5% year on year to S$525.9 million.

Cash flow generation stayed healthy for the group, with free cash flow for FY2024 coming in at S$551.2 million, up 40.5% year on year.

SGX increased its quarterly dividend from S$0.085 to S$0.09, bringing its annualised dividend to S$0.36, up from S$0.34 before the increase.

Management has touted the success of its multi-asset strategy, which successfully grew the bourse operator’s revenue and net profit over the years.

Its foreign exchange (FX) platform saw average daily volume (ADV) jump 47% year on year to reach US$111 billion in FY2024.

Over in the commodities space, iron ore and freight forwarding agreement contracts saw robust volume growth of 52% and 23% year on year, respectively.

Management is targeting to grow group revenue by between 6% to 8% per annum in the medium term by increasing its suite of offerings to attract a wider spread of investors.

It will also focus on growth opportunities for its FX franchise.

SGX recently launched five new Hong Kong Singapore Depository Receipts (SDRs) representing various sectors such as banking, information technology, and consumer discretionary.

This launch has broadened its slate of SDRs, following the  eight Thai SDRs that were launched earlier.

Find out how much dividends SGX is expected to pay in the coming year based on current market forecasts. 

Related Links:

• SGX share price history and share price target
• SGX dividend history and dividend forecasts

#3 – ST Engineering

Singapore Technologies Engineering, or STE, is a technology and engineering firm that serves the aerospace, smart city, and defence sectors.

Shares of the engineering giant hit their 52-week high of S$4.81 recently and are up 17.7% year-to-date at S$4.58 as of this writing.

STE reported a robust business update for its third quarter of 2024.

For 9M 2024, revenue climbed 14% year on year to S$8.3 billion, with all three of the group’s segments recording year-on-year revenue growth.

The group continued to log impressive contract wins of S$8.4 billion for 9M 2024, as shown below.

These order wins have grown STE’s order book to S$26.9 billion as of 30 September 2024, of which S$2.6 billion will be delivered for the remainder of 2024.

An interim dividend of S$0.04 per share was declared, bringing its trailing 12-month dividend to S$0.16.

Back in September, STE opened its new “smart” shipyard to replace its Tuas Yard when its lease expires at the end of 2024.

Gul Yard, which is twice the size of Tuas Yard, utilises technology to support yard operations and promote work safety practices.

Its larger capacity also allows the group to handle larger and more complex projects with greater efficiency.

Just last month, STE’s Urban Solutions business clinched a more than S$60 million contract to design, build and operate a smart city platform for Lusail City in Qatar.

CEO Vincent Chong is optimistic about the group’s prospects.

The group refreshed its five-year targets recently to set a path forward in the post-COVID world.

He is confident that STE can deliver revenue of over S$11 billion by 2026.

It is planning an Investor Day in 2025 to further communicate its goals and strategies.

Meanwhile, the group will continue to invest more in research and development to hone its capabilities and grow its skill set.

Find out how much dividends ST Engineering is expected to pay in the coming year based on current market forecasts. 

Related Links:

• ST Engineering share price history and share price target
• ST Engineering dividend history and dividend forecasts

What would Beansprout do?

These three stocks have proven their mettle and reported strong sets of results. It’s no wonder that their share prices have climbed to new 52-week highs. 

However, based on the current consensus share price targets of these three stocks, it appears that analysts are expecting limited further upside to their share prices. 

That said, we can still look at these blue chip stocks from a dividend income angle. 

Across these three stocks, DBS has the highest dividend yield of 5.1%. ST Engineering offers a dividend yield of 3.5%, while SGX offers a dividend yield of 3.0% with the surge in their share prices. 

Also, while DBS's dividend yield is still close to its historical average, the dividend yields of ST Engineering and SGX are now below their historical averages. 

Hence, I would consider DBS amongst the three stocks if I am looking for names to consider adding to my income portfolio.

To screen for more Singapore stocks which offer potential upside to their share price targets and a dividend yield of above 3%, check out our Singapore dividend stocks screener. 

If you are more interested in Singapore REITs,  join us for our upcoming free webinar on 26 November, where we will discuss what will drive the share prices of Singapore REITs in 2025. Register for free here.

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