Top-tier stocks not only have the potential to increase dividend payouts over time but can also deliver significant capital appreciation in the future.
In this article, we highlight three Singapore blue-chip companies—DBS, Singapore Exchange, and ST Engineering—that offer steady income today along with strong capital growth potential for tomorrow.
Singapore Exchange
SGX remains a dependable dividend payer.
As the sole financial exchange authorized in Singapore, SGX generates consistent recurring revenue from its range of products and services, including trading, clearing, and market data services.
Over the years, this has enabled SGX to maintain a robust dividend for its shareholders.
Since 2001, SGX has maintained an annual dividend payout, withstanding various market cycles, including the Great Financial Crisis, the COVID-19 pandemic, and the high inflation period of 2022-2023.
For the fiscal year 2025 (FY2025), SGX achieved an 11.7% year-on-year (YoY) increase in net revenue, reaching S$1.30 billion.
SGX's adjusted net profit (excluding non-cash and non-recurring items) surged 15.9% YoY to S$610 million, with an adjusted net margin of 47.0%.
Additionally, SGX increased its total dividend by 9% YoY, to S$0.375 per share, which equates to an annualized yield of around 2.2% and a payout ratio of 59.7%.
With new growth initiatives such as expanding derivatives and foreign exchange products, as well as venturing into environmental and new ETF markets globally, SGX is well-positioned for sustainable growth.\
Overall, SGX stands out as a rare blend of stable income and potential for steady future growth.
DBS Group Holdings
DBS has consistently grown its earnings, dividends, and share repurchases through various cycles, demonstrating exceptional resilience.
Recently, Singapore’s largest local bank has been establishing its leadership in digital banking.
Additionally, DBS has diversified its earnings by expanding its high-margin, fee-generating business to complement its core net interest income (NII).
This diversity enables the bank to offer generous dividends and potential capital growth to shareholders.
In the third quarter of 2025 (3Q2025), DBS reported a stable net profit of S$2.95 billion.
Although the commercial book NII softened to S$3.56 billion due to a lower net interest margin (NIM) of 1.96%, DBS’s fee income rose 20% YoY to S$1.58 billion, thanks to its thriving wealth management segment.
Wealth management alone grew by 30.7% YoY to S$796 million, constituting 50.3% of the bank's fee income.
Consequently, DBS raised its ordinary dividend per share by 11% YoY to S$0.60 per share for 3Q2025, including a special dividend of S$0.15 per share, totaling S$0.75 per share.
DBS offers a trailing dividend yield of 5.43%, higher than OCBC’s 4.37% and slightly surpassing UOB’s 5.15%.
With a stable non-performing loan (NPL) ratio of 1.0% and a fully phased-in Common Equity Tier 1 (CET1) ratio of 15.1%, DBS is well-positioned to continue its strong dividend payouts.
The bank's future growth will likely come from its expansion into neighboring regions and further growth in its fee business.
Trading at a premium valuation of roughly 2.2 times its book value, DBS justifies this premium through its market leadership and superior return on equity (ROE).
To sum up, DBS is a rare find, offering excellent dividend income and promising growth prospects.
ST Engineering
ST Engineering is a diversified industrial business with segments in Commercial Aerospace (CA), Defence & Security (DPS), and Smart City solutions (USS).
Its order book of contract backlogs ensures STE has solid long-term earnings visibility.
In its latest update for the first nine months of 2025 (9M2025), STE reported a nearly 69% YoY increase in new contracts, from S$8.3 billion in 9M2024 to S$14 billion in 9M2025.
By 30 September 2025, STE had an order book amounting to S$32.6 billion.
With an estimated total revenue of S$12 billion for 2025, this provides roughly three years of revenue visibility.
For 9M2025, STE’s revenue grew steadily by 9% YoY to S$9.06 billion, although it does not disclose profit growth for its nine-month updates.
For FY2025, STE declared a total dividend of S$0.18 per share, continuing its trend of increasing dividends, translating to an annualized yield of approximately 2.2%. This does not include the proposed special dividend of S$0.05 per share.
While operating with significant leverage (debt-to-equity ratio over 2.0 times and a net debt of S$5.2 billion as of 30 June 2025), STE actively manages this debt level by using divestment proceeds to pay down debt.
STE’s future growth hinges on its ability to win more defence contracts, the resurgence in demand for aerospace maintenance, repair, and overhaul (MRO) activities, and improving the profitability of its USS division.
With a diversified business supported by multi-year contracts, ST Engineering should continue to be a reliable company that offers steady dividends.
The Case for Yield and Growth Stocks in 2026
In an environment of lowering global interest rates, the combination of reliable income and steady earnings compounding becomes particularly potent.
This dual approach offers investors resilient cash flow and a solid path toward consistent share price appreciation as we move into 2026.
The notion that investors must choose between growth and income is a limiting belief.
Effective long-term wealth creation comes from identifying and owning stocks that offer both attributes seamlessly.
What This Means for Investors
For income-focused investors, SGX, DBS, and STE provide a solid foundation for effective dividend reinvestment, ensuring the compounding engine of your portfolio runs smoothly and accelerates capital growth over time.
Growth-oriented investors benefit from these stocks' steady, immediate income, which helps cushion portfolios against market volatility—an attribute often missing in pure growth plays.
In summary, these stocks represent a disciplined strategy for securing superior total returns—a combination of reliable dividends and capital appreciation.
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