The crème de la crème stocks not only can grow their dividend payout over time, but they can also deliver outsized capital appreciation in the future.
In this article, we spotlight three Singapore blue-chip names DBS (SGX: D05), Singapore Exchange (SGX: S68), and ST Engineering (SGX: S63), that can provide steady income today alongside possible strong capital return tomorrow.
Singapore Exchange (SGX: S68) — The Dividend Compounder With Global Ambitions
SGX continues to stand out as a reliable dividend payer.
As the only approved financial exchange in Singapore, SGX can earn constant recurring income from its suite of products and services, including trading, clearing and market data services.
This has allowed the exchange to pay an amazingly resilient dividend to shareholders over the years.
SGX has paid an annual dividend since 2001, a track record spanning 24 years spanning multiple market cycles, including the Great Financial Crisis, the COVID-19 pandemic, and the high inflation period of 2022-2023.
For the full year 2025 (FY2025), the exchange saw an 11.7% year-on-year (YoY) increase in net revenue to S$1.30 billion.
SGX grew even more profitable, with adjusted net profit (excluding non-cash and non-recurring items) soaring 15.9% YoY to S$610 million.
Adjusted net margin came in at 47.0%.
The exchange also raised its total dividend by 9% YoY, to S$0.375 per share.
This represents an annualised yield of roughly 2.2% and an estimated payout ratio of 59.7%.
Through its new growth initiatives, such as expanding its derivatives products and access, new environmental and foreign exchange products, and new ETF products, into new global markets, the bourse operator is well-positioned to deliver sustainable growth.
SGX is a rare combination of stable income and potential for steady future growth.
DBS Group Holdings (SGX: D05) — Banking on Growth and Payout Power
DBS’s proven ability to constantly grow its earnings, dividends and share repurchases, spanning multiple cycles, is something to be marvelled at.
In recent years, Singapore’s largest local bank has been making strides in establishing its digital leadership.
Concurrently, DBS has successfully diversified its earnings, growing its high-margin, fee-generating business as a complement to its core net interest income (NII).
Consequently, the bank can distribute generous dividends while offering potential capital growth to shareholders.
In the third quarter of 2025 (3Q2025), the bank saw a stable net profit of S$2.95 billion.
Commercial book NII softened to S$3.56 billion, owing to a softer net interest margin (NIM) of 1.96%.
Encouragingly, DBS’s fee business grew 20% YoY to S$1.58 billion, with strong momentum from its wealth management segment.
Wealth management surged 30.7% YoY to S$796 million, now making up 50.3% of its fee income business.
As a result, DBS increased its ordinary dividend per share by 11%, compared to 3Q2024, to S$0.60 per share.
Including a special capital return dividend of S$0.15 per share, the bank is paying out a total dividend of S$0.75 per share.
DBS sports a trailing dividend yield of 5.43% – richer than OCBC’s 4.37% and slightly ahead of UOB’s 5.15%.
DBS looks well-placed to continue delivering healthy dividends, underpinned by a solid balance sheet 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%.
The next phase of growth for the bank would be its continued expansion into the neighbouring region, alongside further growing its fee business.
However, DBS is trading at a premium valuation of roughly 2.2 times its book value, a justifiable premium given its market leadership and superior return on equity (ROE).
In summary, DBS is a rare combination of a company that pays excellent income while still offering strong growth prospects for investors.
ST Engineering (SGX: S63) — Engineering Steady Growth With Reliable Dividends
ST Engineering is a diversified industrial business, with operating segments across Commercial Aerospace (CA), Defence & Security (DPS), and Smart City solutions (USS).
Its order book of contract backlogs offers STE solid long-term earnings visibility.
In the industrial’s latest update (9M2025), STE disclosed that new contracts won thus far surged almost 69% YoY from 9M2024’s S$8.3 billion to S$14 billion.
As of 30 September 2025, STE has an order book of S$32.6 billion.
Assuming an estimated total revenue of S$12 billion for 2025, this provides roughly three years of revenue visibility.
For 9M2025, STE saw steady revenue growth of 9% YoY to S$9.06 billion. (The conglomerate does not disclose profit growth for its nine-month update.)
For the full year 2025 (FY2025), STE has declared a total dividend of S$0.18 per share, continuing the industrial’s increasing dividend payout trend, which translates to an annualised yield of approximately 2.2%.
This does not include the proposed special dividend of S$0.05 per share.
The conglomerate operates with significant leverage, posting a debt-to-equity ratio of over 2.0 times, and a net debt of S$5.2 billion as at 30 June 2025.
Investors should note this elevated debt level is being actively managed, as seen by its use of divestment proceeds to pay down debt.
STE’s growth will depend on its continued ability to win defence contracts, the steady rebound in demand for aerospace maintenance, repair and overhaul (MRO) activities, and increasing the profitability of its USS division.
With a diversified business, underpinned by multi-year contracts, STE should continue to be a reliable compounder that pays steady dividends.
The Case for Yield + Growth Stocks in 2026
In an environment characterized by lowering global interest rates, the combination of reliable income and steady earnings compounding becomes profoundly potent.
This duality offers investors a superior delivery of resilient cash flow and a fortified path toward sustained share price appreciation as we enter 2026.
The notion that investors must accept a trade-off – sacrificing either growth for income, or vice versa – is a limiting belief.
Prudent, long-term wealth creation hinges on identifying and owning stocks that deliver both attributes seamlessly.
What This Means for Investors
SGX, DBS, and STE benefit both income and growth-focused investors.
For income-focused investors, these dependable blue-chips provide the bedrock for effective dividend reinvestment, enabling the compounding engine of your portfolio to run smoothly and accelerate capital growth over time.
For growth-oriented investors, these stocks offer the crucial benefit of stable, immediate income to partially cushion portfolios against market volatility, a feature often absent in pure growth plays.
In essence, these stocks represent a disciplined approach to securing superior total returns – the sum of reliable dividends and capital appreciation.
Conclusion – Get Smart: Anchor Your Portfolio
Instead of viewing dividend yield and capital growth as mutually exclusive variables, successful investors recognise them as complementary forces essential for maximising long-term wealth accumulation.
They form the perfect pair for a resilient core portfolio.
SGX, DBS, and ST Engineering stand out as they offer the assurance of resilient income and the potential for steady capital upside.
What are the stock secrets to Singapore’s “quiet millionaires?” Chances are, you’ll find at least one of their favourites in this free report. Download it now and see how these stocks could power your portfolio!
Follow us on Facebook, Instagram and Telegram for the latest investing news and analyses!
Disclosure: Wilson does not own shares in any of the companies mentioned
