4 reliable stocks you can grab for your CPF investment account
An economic storm is looming as Prime Minister Lee Hsien Loong warned of an impending recession that could hit Singapore within the next two years.
Investors were also rattled by rising interest rates and soaring inflation to its highest level in ten years.
The solution to these worries? Look for safe-haven stocks where you can park your money and get a good night’s sleep.
Your CPF account is an almost risk-free place where you can accumulate money to earn 2.5% interest.
However, if you are looking for better returns, the CPF Investment Account (IA) is a place where you can buy safe and reliable stocks that can help you weather a downturn.
Raffles Medical Group Ltd (SGX:BSL)
Raffles Medical Group Ltd, or RMG, is an integrated healthcare provider offering a full range of services from primary to tertiary care.
The group operates three hospitals and more than 100 multidisciplinary clinics and is present in 14 cities in five countries.
RMG reported a strong revenue package for FY 2021 (FY2021), with revenue up 27.4% year-on-year to S$723.8 million.
The increase is due to the provision of services to assist the government in various COVID-19 initiatives such as PCR testing and vaccinations.
Operating profit increased 37.2% year-on-year to S$121.3 million, while net profit improved 27.7% year-on-year to S$84.2 million Singaporeans.
RMG also generated free cash flow of S$107.3 million, up 46.8% year-on-year from S$73.1 million last year.
A total dividend for FY2021 of S$0.028 was paid, slightly higher than S$0.025 paid in FY20.
RMG now has a total of three hospitals operating in China and is cautiously optimistic that these hospitals will see an increase in the number of patients.
Ascendas REIT (SGX: A17U)
Ascendas REIT, or A-REIT, is an industrial REIT with a portfolio of 220 properties worth S$16.4 billion as of March 31, 2022.
These properties are spread across Singapore, Australia, USA and UK.
Being the largest industrial REIT in Singapore and listed since 2002, A-REIT therefore has a long track record and is stable and reliable.
The REIT’s investment properties have grown from just S$0.6 billion in 2003 to S$16.4 billion today.
At the same time, the distribution per unit (DPU) increased at a compound annual growth rate of 3.6% per year over the same period to reach S$0.015258 for fiscal 2021.
The REIT maintains an overall leverage of 36.8% with a low cost of debt of 2.1%.
The interest coverage ratio remained healthy at 5.7 times and nearly 80% of the REIT’s debt is fixed rate, mitigating interest rate increases.
The occupancy rate of the portfolio remained healthy at 92.6%, while rental reversion was positive at 4.6% for 1Q2022.
Singapore Stock Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The group is a multi-asset exchange that offers a wide range of securities to investors and portfolio managers.
For its fiscal first half of 2022 (1H2022) ended December 31, 2021, SGX’s revenue was stable year-on-year at S$522 million.
Net income, however, fell 9% year-on-year due to higher personnel costs and technology spending.
Despite declining earnings, SGX still maintained its interim dividend of S$0.08 per share.
The group enjoys a natural monopoly and has also rolled out initiatives such as setting up special purpose acquisition companies, or SPACs, to boost trading volumes on the exchange.
Sheng Siong Group Ltd (SGX: OV8)
Sheng Siong is one of Singapore’s largest supermarket chains and operates a total of 65 outlets on the island.
The group offers a wide selection of merchandise to its customers, including more than 1,500 products under its 23 house brands.
For the first quarter of 2022 (1Q2022), Sheng Siong’s revenue edged up 6% year-on-year to S$358 million.
The gross margin increased by 9.8% over one year.
In the process, the gross profit margin fell from 27.7% in 1Q2021 to 28.7% in the last quarter.
Net profit climbed 13.9% year-on-year to S$35.2 million.
Sheng Siong also generated free cash flow of S$20.1 million.
The group has secured leases for three new stores in fiscal 2021, two of which will open in the first half of 2022.
In general, Sheng Siong aims to open three to five new stores per year, focusing on areas where it does not have a presence.
In areas where the group is not physically present, it will develop its e-commerce initiatives to provide its products to a large group of customers.
In our FREE special report, Top 9 Dividend Stocks for 2022 – and 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 find out now!
Follow us on Facebook and Telegram for the latest investment news and analysis!
Disclaimer: Royston Yang owns shares of Singapore Exchange Limited and Raffles Medical Group.
The post 4 Reliable Stocks You Can Recover For Your CPF Investment Account appeared first on The Smart Investor.