Why Blue Chips Matter at the Start of a New Cycle
At the beginning of the year, investors were given a brand new opportunity to re-examine whether the stocks in their investment portfolios were still worth holding.
Thanks to its demonstrated scale and execution capabilities across various cycles, blue-chip stocks possess unique stability traits - as interest rates decline and economic growth returns, these high-quality enterprises often lead the market recovery first.
In this article, we focus on introducing three blue-chip stocks that have performed exceptionally well in the Singapore market and are worthy of your long-term holding!
Seatrium Limited (SGX: 5E2)– Earnings Recovery and Growth Optionality
For investors looking for a cyclical, earnings recovery story, look no further than Seatrium, a giant in shipbuilding and marine engineering.
Since the completion of the mega merger with Sembcorp Marine and Keppel Offshore & Marine in February 2023, Seatrium has been making waves in its operating industries.
Business is booming for the shipbuilder, with revenue leaping 34% year on year (YoY), to S$5.4 billion for the first half ending 30 June 2025 (1H2025).
But the real story is the bottom line: Seatrium is becoming much more efficient.
Gross margin doubled (7.4% as of 1H2025) and net margins of 2.7% for 1H2025 tripled compared to 1H2024’s 0.9%.
Return on equity (ROE) flipped positive to 4.5% on an annualised basis as of 1H2025, following years of negativity.
Management has also done a fine job reducing its leverage post-merger; net debt to earnings before interest, taxes, depreciation, and amortisation (EBITDA) slumped from 3.2 times (December 2023) to 1.0 times (1H2025).
Seatrium declared a final dividend of S$0.015 per share for FY2024 in February 2025.
2026 could prove to be a banner year for the group, given a robust net order book of S$16.6 billion (as of 30 September 2025) that provides delivery and revenue visibility to 2031.
Continued operating efficiencies implemented by management, should further boost earnings and cash flows, which could lead to an increase in dividends for 2026.
Capitaland Investment Ltd (SGX: 9CI) – Market Leader With Defensive Strength
CapitaLand Investment Ltd, or CLI, stands out with its huge pool of assets under management (AUM).
As of 5 November 2025, the group boasts funds under management (FUM) amounting to S$120 billion.
The asset manager saw strong momentum across its business segments, with S$2.2 billion monetised and S$3.7 billion raised in total equity via listed and private funds for the nine months ended 2025 as of 30 September 2025 (9M2025).
In the same time period, CLI grew its fee-related revenue to S$900 million, up 7% YoY.
The company’s momentum is best illustrated by the consistent growth in its Fee Income-related Business (FRB) revenue, which has risen for three consecutive years at 9% YoY, increasing from S$984 million in FY2022 to S$1.17 billion in FY2024.
This recurring fee income now contributes 62% of Operating PATMI, up from 40% at CLI’s listing in 2021, reflecting the group’s successful pivot towards an asset-light, fee-based business model.
At the current share price of S$2.88, CLI offers a yield of 4.2%.
However, investors should note that dividend per share growth has been flat over the last few years, with the asset manager electing to pay out special dividends instead during bumper years.
2026 could be a strong year for CLI; its funds and properties could benefit from higher valuations in an easing-rates cycle.
This increase in funds’ valuations could increase fees generated from its FUM.
Keppel Ltd (SGX: BN4) – Cash Flow Engine with Reliable Dividends
Keppel stands out with the strong turnaround it’s been experiencing, with good strides made in both fund management and renewable solutions.
For the first nine months of 2025 (9M2025), Keppel maintained strong operating momentum, securing S$6.7 billion in new Funds Under Management (FUM)
Additionally, earnings from its “New Keppel” (non-core portfolio for divestment and discontinued operations) rose 25% YoY, supporting management’s decision to realign its business.
Recurring income rose 15% YoY on the back of stronger contributions from its asset management arm and operating arm.
Keppel demonstrated a strong commitment to shareholder returns, distributing S$617 million, alongside a nascent share buyback program that has already seen S$92.6 million worth of shares deployed, and over S$400 million in remaining capacity.
Keppel’s financial transformation is best seen in its operating cash flow growth, swinging from negative S$351.7 million for the full year ended December 2021 (during the COVID pandemic) to S$516 million over the trailing twelve months.
While dividend per share has remained stable since FY2021 – averaging approximately S$0.33 per share – there is significant head-room for growth.
This positive outlook is underpinned by rising net profits and the aggressive unlocking of capital.
Notably, the group announced S$2.4 billion of asset divestments during 9M2025, with an additional S$500 million in deals targeted for the coming months.
Keppel currently offers a decent annualised dividend yield of 3.3%.
Similar to CLI, 2026 could be a banner year for Keppel Ltd in a lower interest rate environment, boosting the valuation of Keppel funds and increasing the recurring fees generated from its FUM.
Management has already guided to stronger asset management contributions for the fourth quarter, and the announced increase in future dividends also supports a strong business outlook.
The Bigger Picture: Positioning for the Year Ahead
The outlook for 2026 looks very promising, especially as interest rates are trending downward and the economy remains stable.
This is an excellent scenario for the stock market.
However, things are not all rosy.
It should be noted that there are some negative factors - the global economy may slow down, and the persistence of geopolitical tensions could potentially disrupt this favorable situation.
Holding high-quality blue-chip stocks might enable you to achieve good returns in any market environment.
