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15 Singapore Stocks That Are Likely to Withstand Tough Economic Conditions

profileSudhan P
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Preliminary data from the government shows that Singapore’s economy shrank a record 5.8% in 2020 after it was battered by the pandemic. 

This marks Singapore’s worst recession since independence. 

However, the worst seems to be over and our economy is likely to be on the mend in 2021. 

No matter bad times or good… 

when it comes to investing, we should always aim to invest in companies with rock-solid balance sheets. 

Such companies will be able to ride through any tough economic condition relatively unscathed, compared to those bogged down by huge amounts of debt. 

The last thing companies want during a recession is to have banks hounding on their backs to pay back the money that they are owed. 

Screening for Strong Companies

With the help of a stock screener, I screened out from the 700-odd Singapore stocks some of the companies with strong balance sheets.

Those companies are more likely to withstand the harsh economic conditions brought about by COVID-19 than those that are bogged down by huge amounts of debt.

I used three broad criteria to filter the universe of Singapore-listed stocks. Those criteria and the reasons I chose them are:

  1. Total revenue (more than S$100 million) — to have companies with a sizeable scale
  2. Return on equity (ROE) (between 10% and 30%)  — reveals companies with efficient management
  3. Debt-to-equity (between 0% and 20%) — ensures a strong balance sheet

The screener showed close to 30 stocks meeting the criteria above. 

From there, I filtered down the stocks further to those that I think are worthy of further research for my own portfolio.

Here, I present to you 15 stocks from my final list (sorted according to ROE):

CompanyTickerRevenue
(S$' million)
Return on Equity (%)Debt/Equity (%)Price-to-Earnings Ratio (times)Dividend Yield (%)
AEMAWX446.258.73.012.92.0
PropNexOYY491.043.29.810.43.6
SGXS681052.740.40.022.53.1
Sheng SiongOV81249.132.717.220.83.4
Kimly1D0210.825.50.115.43.3
RiverstoneAP4374.225.42.232.71.1
iFASTAIY155.818.330.675.10.7
UMS558160.717.96.614.93.6
CortinaC41430.615.725.710.32.8
FrenckenE28628.214.030.414.72.1
ValuetronicsBN2357.113.60.310.54.8
SBS TransitS611339.213.136.213.94.3
HRnetGroupCHZ420.913.03.613.45.1
VentureV033166.912.70.718.83.7
TheHourGlassAGS658.211.726.87.83.8

Source: SGX Stock Screener

Further Research Required

As you can see from the list, there are companies that were directly hit by the COVID-19 pandemic, like SBS Transit, while others like Riverstone and Sheng Siong thrived in the environment.

Some may also look way overvalued.

A stock screener serves as a useful stock ideas generation tool.

What investors should then do is to dive deeper into the companies sieved out as not all companies may turn out to be great ones for the long-term.

This article is certainly not a recommendation to buy or sell any of the companies mentioned, but to give readers an idea of how to go about finding stocks to invest in.

Have Burning Questions Surrounding The Stock Market?

Why not check our community at Seedly and participate in the lively discussion regarding stocks!

Disclaimer: The information provided by Seedly serves as an educational piece and is not intended to be personalised investment advice. ​Readers should always do their own due diligence and consider their financial goals before investing in any stock. The writer may have a vested interest in some of the companies mentioned.

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About Sudhan P
It isn't fair competition when only one company in the world makes Monopoly. But I love investing in monopolies. Before joining the Seedly hood, I had the chance to co-author a Singapore-themed investment book – "Invest Lah! The Average Joe's Guide To Investing" – and work at The Motley Fool Singapore as an analyst.
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