Core Insights - Expectations of stable economic growth and improving financial conditions are influencing investor strategies as they approach 2026 [1] - Blue-chip retail stocks like Walmart, Costco, and Lowe's are gaining attention due to their operational resilience and steady earnings performance [1] Economic Context - The economic growth in 2025 moderated as the transition from post-pandemic momentum to sustainable expansion occurred, with business investment softening and global trade remaining uneven [2] - Ongoing policy uncertainties regarding taxation and tariffs led many firms to delay major capital expenditures [2] - Inflation remained above the Federal Reserve's long-term target, prompting cautious interest rate cuts to ease financial conditions [3] Market Performance - Equity markets showed positive sentiment with the Dow Jones Industrial Average gaining approximately 14%, the S&P 500 advancing about 16%, and the Nasdaq Composite rising 19% year-to-date [4] Blue-Chip Retail Stocks - Blue-chip retail stocks are characterized by financial strength and a history of reliable returns, making them less volatile and dependable for investors [5] - These retailers possess strong market positions, brand recognition, and loyal customer bases, providing a competitive edge and growth opportunities [6] Company-Specific Insights Walmart - Walmart is enhancing its omnichannel retail position through technology, e-commerce, and high-margin profit streams [10] - The company has a market capitalization of $931.1 billion and pays a quarterly dividend of about $0.24 per share, with a payout ratio of 37% and a five-year dividend growth rate of 4.9% [11] - The Zacks Consensus Estimate suggests growth of 4.5% in sales and 4.8% in EPS for the current financial year [11] Costco - Costco's membership-driven model is driving strong traffic and brand loyalty, supported by digital capabilities and operational technology [12] - The company has a market cap of $382 billion and pays a quarterly dividend of $1.30 per share, with a payout ratio of 28% and a five-year dividend growth rate of 13.7% [13] - The Zacks Consensus Estimate indicates growth of 7.5% in sales and 11.3% in EPS for the current financial year [13] Lowe's - Lowe's is implementing a Total Home Strategy to enhance its competitive position through improved Pro capabilities and online experience [14] - The company has a market cap of $139.6 billion and pays a quarterly dividend of $1.20 per share, with a payout ratio of 39% and a five-year dividend growth rate of 15.6% [15] - The Zacks Consensus Estimate suggests growth of 2.9% in sales and 2.2% in EPS for the current financial year [15]

Core Insights - Singapore blue-chip stocks are traditionally viewed as stable investments with strong financials and reliable dividends, but they also carry inherent risks that investors must consider [1][18]. Group 1: Definition and Characteristics - A blue chip is typically a large company with solid financials, stable earnings, prudent money management, and consistent dividends, often represented in the Straits Times Index [2]. - Blue-chip companies are usually industry leaders, such as DBS Group Holdings, Singapore Telecommunications Limited, and Singapore Exchange Limited [2]. Group 2: Risks Associated with Blue-Chip Stocks - **Market Sensitivity**: Blue-chip stocks are not immune to market fluctuations; historical examples show that even established companies can experience significant share price declines during downturns [3][4]. - **Regulatory and Policy Changes**: Many blue-chip companies operate in highly regulated industries, making them vulnerable to changes in regulations and competitive environments, as seen with Singtel's profit contraction due to adverse regulatory rulings [6][7]. - **Industry-Specific Challenges**: Blue-chip companies face unique challenges within their industries, such as the shift to online retail impacting physical retailers like CapitaLand Integrated Commercial Trust [9][10]. - **Economic Sensitivity**: Blue-chip stocks can be cyclical and sensitive to economic conditions, as demonstrated by Singapore Airlines' significant revenue loss during the COVID-19 crisis [11][12]. - **Overvaluation in Bull Markets**: Blue-chip stocks can become overvalued during bull markets, leading to compressed future returns and increased risk of price corrections; for instance, DBS's high price-to-book ratio indicates potential overvaluation [14][16]. Group 3: Investment Strategies - Maintaining a diversified portfolio is essential to mitigate risks associated with market sensitivity, regulatory changes, industry challenges, economic sensitivity, and overvaluation [5][19]. - Investors should conduct careful analysis of price-to-earnings and price-to-book ratios, dividend yields, and business fundamentals to ensure investments have growth potential [16][17].

Core Viewpoint - The article discusses the normalcy of share price declines in blue-chip stocks, emphasizing that temporary pullbacks can occur even with solid fundamentals, and highlights three Singapore blue-chip stocks that may recover if market sentiment improves [1]. SATS Limited (SGX: S58) - SATS Limited has seen a decline of over 5% year-to-date due to global trade disruptions and the impact of its recent acquisition of Worldwide Flight Services, which has increased its debt levels [2][3]. - In Q1 FY2026, SATS reported a revenue growth of 10% year-on-year to S$1.51 billion, with net profit increasing by 9.1% to S$70.9 million, driven by record cargo volumes and higher yields [3]. - The company's debt-to-equity ratio remains stable at 1.5 times, and it has increased its dividend payout from S$0.03 to S$0.10 per share, indicating confidence in future business prospects [4]. Thai Beverage Public Company Limited (SGX: Y92) - Thai Beverage has experienced a decline of nearly 14% year-to-date, attributed to softer domestic demand, inflationary pressures, and political instability in Thailand [5][7]. - In 2Q FY2025, revenue was relatively flat, but sales volumes for spirits and beer increased by 2.6% year-on-year, while non-alcoholic beverages saw a 0.9% rise [6]. - Despite an 11.8% contraction in net profit due to various challenges, ThaiBev has maintained a stable dividend of THB 0.15 per share and has not cut dividends in the past five years [7][9]. Wilmar International Limited (SGX: F34) - Wilmar's stock is up 5.5% year-to-date, but it faces challenges due to an ongoing legal case regarding Indonesian cooking oil export permits, which has affected its share price [10]. - The company reported a revenue of US$19.1 billion for 3Q2025, a 7.4% year-on-year increase, with core net profit rising by 71.6% to US$357.2 million, supported by higher volumes in its Food Products segment [11]. - Wilmar has a manageable net gearing ratio of 0.82 times and has consistently paid dividends since 2006, although its latest interim dividend was slightly reduced [12]. Investment Considerations - The article suggests that underperformance relative to the Straits Times Index does not automatically make a stock a buy; investors should focus on companies with improving fundamentals and strong cash flow [14]. - The potential for recovery in these blue-chip stocks is linked to their ability to navigate temporary headwinds and capitalize on improving market conditions [15].

Core Insights - Blue-chip stocks are often perceived as safe investments, but this belief can lead to missed opportunities and unforeseen risks [1][2] Myth 1: Blue-Chips Are Always Safe and Risk-Free - Investors mistakenly believe that blue-chip stocks are immune to risks, but even established companies can face challenges [3] - Singtel's EBIT margin decreased from 32% in FY2015 to 19% in FY2021 due to competition and rising 5G costs, highlighting that blue-chip status does not guarantee stability [4] - CapitaLand Integrated Commercial Trust experienced pressure on unit prices despite high occupancy rates, demonstrating vulnerability to market changes [4] Myth 2: Blue-Chips Don't Deliver Growth, Only Stability - Contrary to the belief that blue-chips cannot grow, some companies continue to achieve significant growth [5] - ST Engineering reported a 7.2% revenue increase to S$5.9 billion and a nearly 20% rise in net profit to S$403 million in the first half of 2025 [6] - DBS Group's dividends increased nearly 15% annually from 2019 to 2024, showcasing the potential for growth among blue-chip companies [7] Myth 3: Blue-Chips Don't Need Monitoring - Continuous monitoring of blue-chip stocks is essential, as business conditions can change [8] - Mapletree Logistics Trust saw a 12.4% year-on-year decline in distribution per unit in Q1 FY25/26, despite previously being viewed as a reliable REIT [9] - Rising finance costs and underperforming portfolio segments can negatively impact cash flow and dividends, emphasizing the need for regular evaluation [10][11] Implications for Investors - Blue-chips should be treated as core holdings but require the same level of scrutiny as any other stock [13] - Investors should review fundamentals quarterly, compare dividend growth to earnings growth, and monitor competitive and economic conditions [14] - Identifying blue-chips that are still growing and rewarding shareholders can lead to valuable investment opportunities [15] Strategic Approach - Blue-chip status provides a strong foundation, but active monitoring and strategic position sizing are crucial for portfolio growth [16] - The combination of blue-chip stability with diligent oversight can enhance investment success [17]

Core Insights - The Straits Times Index (STI) is a dynamic representation of Singapore's top 30 companies, reviewed quarterly to ensure competitiveness [1] - Recent changes to the STI include the replacement of Jardine Cycle & Carriage with Keppel DC REIT in June 2025 and Frasers Centrepoint Trust taking over Emperador in March 2024 [2] Reserve List Companies - Five companies are currently on the reserve list for potential inclusion in the STI, all of which offer dividends, appealing to income-seeking investors [2] - The latest additions to the reserve list include Olam Group and YangZijiang Financial, replacing CapitaLand Ascott Trust and ComfortDelGro Corporation [3] Keppel REIT - Keppel REIT has a portfolio valued at S$9.4 billion, with property income rising 9.1% YoY to S$136.5 million in 1H2025 [4] - Despite a 2.9% drop in distribution per unit (DPU) to S$0.0272, it offers a 5.5% dividend yield at a price of S$1.00 [5] - The REIT maintains a healthy occupancy rate of 95.9% and has seen a rental reversion of 12.3% [5][6] NetLink NBN Trust - NetLink NBN Trust operates Singapore's passive fibre network, generating 84% of its revenue from regulated services [7] - In Q1FY2026, revenue grew 1.9% YoY to S$102.8 million, but profit after tax declined 9.2% to S$23.3 million due to higher operating expenses [8] - The trust declared a distribution of S$0.0536 per unit for FY2025, translating to a 5.6% yield at a unit price of S$0.96 [9] Suntec REIT - Suntec REIT manages a S$12.2 billion portfolio and reported gross revenue of S$234.5 million, up 3.3% YoY in 1H2025 [10] - DPU increased by 3.7% to S$0.03155, resulting in a 4.8% dividend yield [10] - The REIT's Singapore office occupancy is at 99.0%, with plans for asset enhancements in the second half of 2025 [11] YangZiJiang Financial - YangZiJiang Financial operates in fund and investment management, reporting total income of S$123.6 million, down 23% YoY in 1H2025 [12] - Profit attributable to equity holders rose 28% to S$137.7 million, despite a decline in interest income [13] - The company is reallocating its portfolio towards Southeast Asian ventures and has a proposed spin-off of its maritime business [14][15] Olam Group - Olam Group's revenue from continuing operations surged 49.8% YoY to S$15.3 billion in 1H2025, driven by the Olam Food Ingredients segment [16] - Profit attributable to owners increased 574% to S$323.8 million, marking a significant turnaround [17] - The company declared an interim dividend of S$0.02 per share, providing a 5.1% yield at a share price of S$0.99 [18]

Group 1: Market Overview - Singapore's market leaders are dominating headlines, with blue-chip stocks performing well and DBS nearing record levels [1][3] - Dependable dividend payers are in focus, with cash-rich stocks offering yields above 4% and REITs pursuing acquisition opportunities for future growth [1][2] Group 2: Stock Performance - Top-performing stocks of 2025 are being highlighted to assess if their rallies can continue, with CICT potentially benefiting from falling interest rates [2][4] - Keppel Corporation's strong share price performance raises questions about its ability to maintain momentum [2][4] - The Chinese government's digitalisation push is providing fresh momentum for select tech players [2][4] Group 3: Specific Stock Insights - Three cash-rich Singapore companies with dividend yields of 4% or more are being spotlighted beyond the blue-chip index [2] - Four reliable blue-chip stocks are identified for their stability and consistency [3] - DBS is approaching its all-time high, prompting considerations for investors on whether to lock in profits or hold [3] - Four Singapore REITs are noted for having an attractive pipeline of acquisition opportunities that could fuel further growth [3][4]

Core Insights - Blue-chip stocks are essential for a stable investment portfolio, providing a reliable source of passive income through dividends [1] Group 1: DBS Group (SGX: D05) - DBS is Singapore's largest bank by market capitalization, offering a wide range of banking, insurance, and investment services [3] - In 1H 2025, total income rose by 5% year on year to S$11.6 billion, driven by a 3.2% increase in net interest income to S$7.3 billion [3] - Fee and commission income surged 17% year on year to S$2.4 billion, with profit before tax reaching a record S$6.8 billion, up 3% year on year [4] - Net profit decreased by 1% year on year to S$5.7 billion due to a 15% global minimum tax rate [4] - An interim dividend of S$0.75 was declared, which is 39% higher than the previous year's S$0.54 [5] Group 2: Singapore Exchange Limited (SGX: S68) - SGX is the sole stock exchange operator in Singapore, enjoying a natural monopoly [6] - For FY2025, net revenue increased by 11.7% year on year to S$1.3 billion, with net profit excluding one-off items climbing 16% year on year to S$609.5 million [6] - A final dividend of S$0.105 was declared, 16.7% higher than the previous year's S$0.09 [7] - SGX anticipates medium-term revenue growth of 6% to 8% per annum, supported by product developments and global partnerships [8] Group 3: Singapore Technologies Engineering (SGX: S63) - STE operates in aerospace, smart city, and public security sectors, known for consistent dividend payouts [9] - Revenue for 1H 2025 rose 7.2% year on year to S$5.9 billion, with operating profit improving by 15.2% year on year to S$602.2 million [9] - Net profit increased nearly 20% year on year to S$402.8 million, with an interim dividend of S$0.04 declared [10] - The order book stood at S$31.2 billion, with S$5 billion expected to be delivered for the remainder of the year [10] Group 4: SATS Ltd (SGX: S58) - SATS provides air cargo handling services and is Asia's leading airline caterer, operating over 225 stations across 27 countries [12] - Revenue for 1Q FY2026 rose 9.9% year on year to S$1.5 billion, while operating profit increased nearly 11% year on year to S$125.2 million [13] - Net profit increased by 9.1% year on year to S$70.9 million, with cargo tonnage reaching a record high of 3.2 million tonnes [13] - The number of flights handled rose 3.2% year on year to 279,100, and meals served increased by 5.6% year on year to 39.1 million [14]

Economic Outlook - Analysts forecast an average of 5% year-over-year (YOY) earnings growth for S&P 500 companies, indicating a mix of optimism and caution among investors [1][2] - Growth expectations have recently increased, especially for tech stocks, although the growth rate is expected to be slower than the previous year [2] Investment Strategies - Companies are awaiting clarity on tariffs, which complicates accurate forecasting for analysts and investors [3] - Large-cap, blue-chip companies are recommended as a strategy to navigate uncertainty due to their strong balance sheets, cash flow, and pricing power [3] Company-Specific Insights Alphabet Inc. (GOOGL) - Current stock price is $174.12 with a 12-month price forecast of $200.00, representing a 14.86% upside [5] - In Q1, revenue increased by 12% YOY and earnings per share (EPS) rose by 49% YOY, with significant growth in Google Cloud [6] - The company is investing in future growth areas such as autonomous driving, AI chip development, and quantum computing, alongside a $70 billion share buyback [7] Eli Lilly and Company (LLY) - Current stock price is $781.06 with a 12-month price forecast of $1,011.61, indicating a 29.52% upside [9] - The company has a strong position in the GLP-1 drug category and is developing an oral version of its treatment [10] - LLY stock is projected to see earnings growth of over 34% in the next year, with a consensus price target of $1,012 [11] JPMorgan Chase & Co. (JPM) - Current stock price is $282.81 with a 12-month price forecast of $276.80, suggesting a slight downside of 2.13% [13] - The bank has achieved a total return of over 256% in the last five years, benefiting from higher interest rates [14] - Expected earnings growth for JPM is 7.2%, which is above the S&P average, and the company offers a dividend yield of 1.92% [15]

Core Viewpoint - The retail sector is facing economic challenges due to rising trade uncertainties and tariffs, but select blue-chip retailers possess the financial strength and adaptability to navigate these conditions effectively [1][2]. Industry Overview - Rising tariffs are increasing costs for retailers, particularly those with global supply chains, which can squeeze margins and lead to consumer price hikes [2]. - Established retail companies can adjust sourcing strategies and negotiate supplier contracts to offset rising costs, allowing them to manage economic uncertainties better than smaller competitors [2]. Blue-Chip Retailers - Market experts favor blue-chip stocks like Walmart Inc. (WMT), Costco Wholesale Corporation (COST), and The Home Depot, Inc. (HD) for long-term stability and growth due to their financial resilience and history of delivering robust returns [3][5]. - Blue-chip stocks are less vulnerable to market fluctuations and provide steady dividend payouts, making them attractive for both experienced and novice investors [4]. Company Highlights Walmart - Walmart's market capitalization is $719.6 billion, with a trailing four-quarter earnings surprise of 7.4% [8]. - The Zacks Consensus Estimate for Walmart's current financial-year sales and EPS suggests growth of 3.4% and 4.8%, respectively, from the previous year [9]. - Walmart pays a quarterly dividend of about 23.5 cents per share, with a payout ratio of 33 and a five-year dividend growth rate of 2.9% [9]. Costco - Costco has a market capitalization of $428.2 billion, with a trailing four-quarter earnings surprise of 0.8% [10]. - The Zacks Consensus Estimate for Costco's current financial-year sales and EPS implies growth of 7.7% and 11.4%, respectively, from the previous year [10]. - Costco pays a quarterly dividend of $1.16 per share, with a payout ratio of 28 and a five-year dividend growth rate of 13.2% [10]. Home Depot - Home Depot's market capitalization is $368.7 billion, with a trailing four-quarter earnings surprise of 2.6% [13]. - The Zacks Consensus Estimate for Home Depot's current financial-year sales calls for growth of 2.7% from the previous year [13]. - Home Depot pays a quarterly dividend of $2.30 per share, with a payout ratio of 59 and a five-year dividend growth rate of 11.2% [13].