According to Investopedia, a defensive stock is a stock that is able to provide a consistent dividend and retain stable earnings regardless of the market condition. Due to a regular demand for their products and services, these stocks tend to remain relatively stable even during a market downturn. Conversely, they tend to underperform the market during times of economic expansion.
For this week’s column, we feature 4 defensive stocks listed on SGX and how they fared for the past year.
M1 Limited (SGX: B2F)
M1 Limited is one of the major telecommunications companies providing mobile and fixed services to consumers and corporate customers in Singapore. As of 30 September 2018, M1 has around 1.36 million postpaid customer base.
On 27 September 2018, share price of M1 soared after Keppel Corp and Singapore Press Holdings (SPH) announced their plans to take over M1 with a pre-conditional voluntary general offer of S$2.06 a share.
AxiataGroup Bhd is currently the largest shareholder of M1 with a stake of 28.7% and according to reports, the group is likely to reject the offer from Keppel and SPH.
The share price of M1 was trading at $2.08 as on Friday, 4 January 2019. This is a 16.9% increase compared to the closing price of $1.78 a year ago on 4 January 2018. M1 distributed a total dividend of 11.4 cents in 2018, which represents a dividend yield of 5.48% based on the latest trading price.
Raffles Medical Group Ltd (SGX: BSL)
Raffles Medical Group Ltd is a Singapore-based healthcare provider which operates over 100 medical clinics and other general medical service businesses. Their flagship hospital is Raffles Hospital. The company focus on three segments – Healthcare Services, Hospital Services, and Investment Holdings.
Raffles Health Insurance (RHI), a wholly-owned subsidiary of Raffles Medical Group, launched Raffles Shield on 1 August 2018. Raffles Shield is the 7th private integrated shield plan to be launched in Singapore and covers 3 pre-existing conditions.
Raffles Medical distributed a dividend of 2.25 cents in 2018, a dividend yield of 2.06%. The opening price on 4 January 2018 was $1.11. The share price remained relatively stable throughout 2018 and closed at $1.09 on 4 January 2019.
Sheng Siong Group Ltd (SGX: OV8)
Established in 1985, Sheng Siong Group Ltd was listed on the SGX Mainboard in 2011. As of August 2018, they operate supermarket/grocery retail stores in 50 locations across Singapore.
To support their retail operations, the company built a customised central distribution centre in 2011 to leverage on an extensive distribution network, food processing capabilities and warehousing facilities.
Sheng Siong saw a dip in net profit of 9.4% to $17.8 million for Q3 2018. This is mainly due to an increase in administrative expenses and staff costs as the group opened more stores. Revenue was up 8% to $227.9 million, with new stores as the major source of revenue growth. A total of 10 new stores were opened in 2018.
Share price of Sheng Siong closed at $1.07 on Friday (4 January 2019). Compare to the share price of $0.925 a year ago on 4 January 2018, this is a 15.7% increase. Based on the latest closing price, Sheng Siong has a dividend yield of 3.18%. A total dividend of 3.4 cents was issued in 2018.
Wilmar International Limited (SGX: F34)
Founded in 1991, Wilmar International Limited is one of the leading agribusiness group in Asia. The group operates through four segments – Tropical Oils, Oilseeds and Grains, Sugar, and others. They own over 450 manufacturing plants and spans over 50 countries.
Wilmar recently announced a new plan to monitor its palm oil suppliers using satellites in December 2018. If suppliers are found to be clearing forest for the plantation, they will be removed from Wilmar’s supply chain. The programme was developed to increase the effectiveness of its current No Deforestation, No Peat, No Exploitation (NDPE) policy.
Wilmar had a dividend yield of 3.35% last year, based on the total dividend of 10.5 cents in 2018. The latest closing price of $3.13 was a slight decrease from the closing price of $3.22 a year ago.
Can Your Investments Survive 2021 And Beyond?
While most of us have survived the year, how has your portfolio fared? The financial markets took us and our emotions on a wild roller coaster ride in 2020, leading to some poor decisions like panic selling or missing out on opportunities as fear and uncertainty held them back.
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4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.