Best Singapore Blue Chip Dividend Stocks to Buy Now in 2024 (New)

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Blue chip stocks are some of the most stable companies which are perceived as lower risk compared to the companies with a lower market capitalization. Amount all types of stocks, blue chip stock are often the most popular and some even pays a dividend income for the investors.

Perfect for both new investors who just started investing and experienced investors looking to build passive income through investing in high dividend paying stocks, let’s take a look at some of the best blue-chip stocks that pays dividend.

Best Blue Chip Dividend Stocks to Invest in Singapore

When we are talking about Singapore blue chip stocks, we are talking about some of the biggest companies listed on the Singapore Stock Exchange (SGX). These are the companies which are often also household names where the average Singaporeans will know.

• Finding blue chip dividend stocks means to find the biggest companies that pays a dividend
• Finding good blue chip dividend stocks means not only find a big company that pays dividend, but a company that will mot probably be stable as well.

About The List of Best Blue Chip Dividend Stocks in Singapore

Unsurprisingly, the stocks with the largest market cap are generally banks stocks.

Finding a good blue chip dividend paying stock don’t just stop here.

Personally, I have my own set of criteria that the blue chip stock need to pass to be included for consideration when deciding if I should invest in it for my dividend portfolio.

And also, don’t forget to gain a deep understanding of each of the stocks before making any buying or selling decisions.

With that said, lets take a look at some criteria that I will also look at when doing my stocks selection.

Criteria For Selecting The Best Blue Chip Dividend Stocks in Singapore

Dividend investing can have many variations, and one such variations is creating your dividend portfolio with the best blue chip dividend stocks, stocks of big and relatively stable companies that pays dividend and special dividends to investors on a periodic basis.

Here I am going to go through some of the criteria I’ve set in place when deciding if the blue chip stock is worth considering.

Market Capitalization

Market Capitalization or also known as Market cap (M. Cap), it refers to the size of the company in terms of it’s market size. Depending on where you are located, companies that list on the stock exchange can range from a small as a few million dollar to trillions of dollars.

Stocks are generally differentiated into different level of market caps:

• Large Cap (Blue-Chip Stocks)
• Mid Cap (Approx. 50% of the Stocks)
• Small Cap (Penny Stocks)

Large cap companies are generally also called as blue chip companies, these are stock that have the largest market cap and often make up a huge percentage of the total Straits Times Index (STI).

Blue-chip stocks just mean that these are big companies known for being valuable, stable and established. 

Thus, when I am looking for blue chip stocks listed on the Singapore Stock Exchange, I’ll look for companies with a market cap of at least $500 Million.

(US’s definition of large cap is more than $10 Billion in valuation, but in SGX, we can hardly find a company that is more than $10 Billion making the US’s definition of large Cap stock’s irrelevant for Singapore investors.)

The reasons are simple:

• STI index are made up of stocks with market cap that are more than $4 Billion, thus the market cap I choose cannot be too high.
• Companies with $500 million market cap and more offers high level of liquidity even for bigger investors.
• The criteria is flexible enough for us to screen for blue chip stocks which can be great companies with high growth potential as well.

Criteria: More than $500 Mill Market Cap

Acceptable Price to Earning Ratio

Price to Earning ratio is also known as PE ratio. This is the most popular valuation method investors used to determine if the stock is “overvalued” or “undervalued”.

Lower PE will mean the stock is “less expensive”, higher PE will mean the stock is “more expensive” in terms of the market price.

The average PE is 20 to 25, and since I prefer to invest conservatively, I will choose the PE of 20 as my cut off point.

The reasons for the PE of 20 is due to the following reasons:

• PE that is more than 20 are generally considered overvalued and are not good choice for investment.
• PE with less than 20 offers a higher probability of finding a good valued blue chip dividend stock that is relatively stable.

Criteria: Less than 20 PE Ratio

Reasonable Dividend Yield

Dividend yield is the dividend distributed by the company. They generally distribute their dividend on a periodic basis such as quarterly, half yearly or annually.

While a high dividend yield is great, it is good to note that is it calculated based on the past dividend distribution and not what you are going to get in the future.

If the dividend yield seems unreasonably high, caution need to be taken as it can be a red flag, and you should look deeper on why the high dividend yield to understand if it is really sustainable. 

By default, for all dividend stocks I will look for those that is more than 2.5%.

Why?

2.5% is the same rate of return from an “risk-free” investment such as our CPF, and when we are investing, we want to have more than that amount of return on our investment.

Criteria: More than 2.5% Dividend Yield

Acceptable Return-On-Equity

Return-On-Equity is commonly also called as ROE, similar to ROA (Return on Assets) and ROIC (Return-On-Invested-Capital), it helps to measure the effectiveness of the management team in managing the company.

High ROE will mean the management team is effective in utilizing the money to operate the business and a low ROE will mean otherwise. And if it is a negative (-ve) ROE, it will just mean the business is losing money, a red flag for a badly managed business.

As a dividend investor myself, I personally will look for companies with an ROE of at least 10% or more, and here’s why:

• 10% ROE is a reasonable number for business that have a generally good management, and with this, we will probably got rid of 80% of the badly managed companies.
• ROE of less than 10% while is still acceptable in certain cases, as an dividend investor looking for companies that will have a higher potential of growing their business and maybe their dividend, a ROE of at least 10% is much preferred.

Criteria: More than 10% ROE

Which is The Very Best Singapore Blue Chip Stocks to Buy For High Dividend Yield?

In the list of the best blue chip stocks in Singapore, there are a few that stands out from the rest of the stocks.

If you’ve observed it carefully, these blue chip stocks are mainly from these few sectors:

• Banking & Investment Services (Singapore Banks)
• Real Estate (Real Estate Investment Trust, REITS)
• Healthcare Services
• Food & Beverages
• Transportation

This can serve as a hint at what are the types of blue chip stocks you may want to consider to be inside your dividend portfolio.

Personally, I will prefer Singapore banking stocks and REITs as it is within my own circle of competence.

When choosing the right stock to invest you’ll need to look into a few things such as:

• Fundamental analysis of the blue chip stock you are looking to buy or sell.
• Moat analysis of the company and know if the company have a strong unbeatable moat.
• Circle of Competence where you have the capability and knowledge to make sound assessment. 

Learning how invest is not so straightforward as to buy anything anyone else tells you to. What you learn here can be a good reference of what you should do next.

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Investing in Singapore blue chip stocks offers a great way to earn an dividend income with a relatively high level of stability. But if you want to build a strong dividend portfolio, these articles can help:

• Best Dividend Stocks In Singapore
• Best High Dividend REITs in Singapore
• Best Singapore Bank Stocks For Dividend
• Best Undervalued Dividend Stocks in Singapore
• Best Dividend ETFs in Singapore

Before we go, do let me know which dividend stock on the Singapore stock market do you like best and why.

Disclaimer: I may or may not have invest in any of them, what’s listed here is only for entertainment purpose only and it should never be used as any form of investment advice. This is my diary on my stock analysis, while I’ve been investing for +15 years, I am still learning. I wish to share what I learn during my investment journey so you may learn from both my success and mistakes. Enjoy!

• Dividend Investing Singapore: Complete Beginners Investor Guide
• Best Undervalued Stocks in Singapore That Pays High Dividend in 2024 (Updated)
• Price to Sales Ratio (P/S Ratio): Investor’s Guide to Valuation Metrics When Profit is Absent
• Price to Earning Ratio: Dividend Investor’s Essential Metric to Know
• 3 Best Singapore Bank Stocks To Buy Now For High Dividend Yield in 2024 (Updated)

Antony C.

Founder & Financial Writer at Income Buddies | Website | Posts by Author

Antony C. is a dividend investor with over 15+ years of investing experience. He’s also the book author of “Start Small, Dream Big“, certified PMP® holder and founder of IncomeBuddies.com (IB). At IB, he share his personal journey and expertise on growing passive income through dividend investing and building online business. Antony has been featured in global news outlet including Yahoo Finance, Nasdaq and Non Fiction Author Association (NFAA).

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