To The Moon

The Central Provident Fund Ordinary Account is a cornerstone of Singapore's savings landscape, offering a dependable and stable 2.5% annual return.

For investors seeking higher potential income, selecting quality dividend stocks with strong financials, reliable cash flow, and sustainable payouts is a critical first step.

Here are three companies currently presenting compelling opportunities.

The Importance of Corporate Cash Reserves

Cash is a company's primary defense mechanism.

Firms with substantial cash holdings can navigate economic downturns without distress.

This financial flexibility safeguards dividend distributions during tough times and also enables strategic moves like acquisitions, share repurchases, and special dividends.

For investors, it provides a vital safety net.

Evaluating Dividend Stocks Against the CPF OA

The comparison centers on opportunity cost.

The CPF OA's 2.5% return is essentially risk-free and requires no management.

To warrant moving capital, a dividend stock must offer a materially higher yield while also demonstrating fundamental stability.

A high yield is only attractive if the business is robust enough to maintain its payouts over the long term.

Venture Corporation Limited — The Cash-Rich Blue Chip

Venture Corporation is a global leader in electronics manufacturing and technology solutions.

Its focus on high-value, capital-light operations allows it to convert a large portion of profits directly into free cash flow.

For the fiscal year ending 31 December 2025, the company reported free cash flow of S$223.5 million.

While this marked a 52% decrease from the previous year's S$465.7 million, the decline was attributable to increased capital expenditure for new manufacturing capabilities and future growth initiatives.

Despite these investments, the company's balance sheet remains exceptionally strong.

Venture held over S$1 billion in net cash with zero bank debt, even after paying a special dividend of S$0.05 per share.

With an annual dividend around S$0.75 per share, the stock offers a trailing yield of approximately 4.8%, significantly outperforming the CPF OA rate.

DBS Group — The Dividend Growth Compounder

While shifting interest rates have moderated net interest income growth, DBS has offset this through robust performance in its wealth management division.

For the first quarter of 2026, total income rose 1% year-on-year to a record S$5.95 billion, fueled by double-digit growth in wealth management fees.

Quarterly net profit reached S$2.93 billion, pushing the return on equity to 17.0%.

The bank maintains a substantial capital buffer with a Common Equity Tier-1 ratio of 16.9%, underscoring its resilient financial position.

Renowned for rewarding shareholders, DBS declared a total dividend of S$0.81 per share for Q1 2026, an 8% increase from the same period last year.

This translates to a trailing dividend yield of about 4.5%, which is more than double the CPF OA benchmark.

Haw Par Corporation Limited — The Defensive Income Generator

Best known as the owner of the Tiger Balm brand, Haw Par is structured like a financial stronghold.

Demand for its consumer healthcare products is highly resilient, continuing regardless of economic conditions.

Coupled with its strategic investment in UOB, this grants the company durable earnings stability.

Its latest annual report showed a 16.3% year-on-year increase in net profit to S$265.5 million.

Management maintains a conservative dividend payout ratio of approximately 33.3%.

This prudent approach makes its core annual dividend of S$0.40 per share exceptionally secure.

While Haw Par's trailing dividend yield is around 2.5%, similar to the CPF OA rate, it serves as a defensive anchor for an investment portfolio.

As of 31 December 2025, the group held S$791.4 million in cash against borrowings of just S$44.3 million, indicating a very low risk of capital loss.