During market volatility, investors often return to the basics: growing profits and sustainable dividends.
When companies grow earnings and raise payouts, this signals confidence in their future cash flow.
Recently, four Singapore blue chips achieved that.
Let’s take a closer look at what stronger profits and bigger dividends from these four actually mean.
Why Profit Growth Matters for Dividend Investors
The key ingredients for reliable dividends are genuine, rising profits and free cash flow.
When their profits go up, companies have more flexibility to reward shareholders.
A growing dividend usually shows management is optimistic about what lies ahead.
What’s more, when increases in dividends are driven by real profit growth, the payouts tend to be here to stay.
DBS Group (SGX: D05) — Banking Strength Supporting Payout Growth
Banks are at their healthiest financially when lending stays strong and fee income keeps climbing.
The bank’s solid profits and sturdy balance sheet give management the ability to continue rewarding shareholders with growing dividends.
DBS pulled in S$11.0 billion in net profit for FY2025, a 3% decline from the previous year, as higher tax expenses from the implementation of the global minimum tax weighed on the bottom line.
Yet, total income grew 3% year on year (YoY) to S$22.9 billion, thanks in part to a jump in non-interest income.
As interest rates eased up, the bank’s net interest margin (NIM) slipped to 2.01%.
But fee income surged 18% to S$4.90 billion, driven mostly by growth in its wealth management.
For FY2025, DBS declared a total dividend of S$3.06 per share, comprising S$2.46 in ordinary dividends, plus a special capital return of S$0.60.
With the bank trading at S$55.37, the yield is approximately 5.5%.
All this just goes to show that strong profits give banks like DBS the firepower to deliver bigger and more dependable dividends over time.
Keppel Ltd. (SGX: BN4) — Transformation Driving Returns
Keppel shows how a smart transformation can really boost shareholder returns.
By selling off assets and moving money into parts of the business that bring in more, companies like Keppel free up cash and leave themselves with more to pay out in dividends.
Over the past few years, Keppel’s been busy reshaping its portfolio and focusing on monetising its assets.
For FY2025, Keppel’s core business – infrastructure, real estate, and connectivity – delivered net profit of S$1.1 billion, up 39% YoY.
This excludes the impact of its non-core portfolio and discontinued operations, which resulted in a group-level net profit of S$789 million for the year.
For FY2025, it proposed total dividends of S$0.47 per share, which is a solid 38% jump from the S$0.34 in FY2024.
With its shares trading at S$12.21, Keppel offers a dividend yield of about 3.8%.
When a company executes its transformation strategy well, shareholders see it in their wallets.
ST Engineering (SGX: S63) — Order Book Strength and Dividend Stability
Singapore Technologies Engineering, or ST Engineering, demonstrates how long-term contracts translate into reliable income for shareholders.
The group, which operates across aerospace, defence and public security, and urban solutions, ended 2025 with a robust order book of S$33.2 billion, which provides high revenue visibility going forward.
This stability allows management to plan capital allocation with greater confidence and sustain regular dividends.
For FY2025, revenue was up 9% YoY to S$12.35 billion, while base operating net profit rose 21% YoY to S$851 million.
It announced a total dividend of S$0.23 per share for FY2025, including a special dividend of S$0.05 per ordinary share.
With its share price at S$11.15, the stock offers a yield of roughly 2.1%.
ST Engineering highlights how strong order books and recurring contracts can support steady dividend payments.
Singapore Exchange (SGX: S68) — Market Activity Boosting Shareholder Returns
Singapore Exchange (SGX) is a prime example of how a well-run market infrastructure business can turn busier markets into real gains for shareholders.
Its operations go beyond stocks, spanning equities, derivatives, fixed income, currencies, commodities, and indices.
That kind of diversification keeps earnings steady, even when some markets slow down.
In the first half of FY2026 (1HFY2026), SGX delivered an adjusted net profit of S$357.1 million, up 11.6% from last year.
Net revenue grew 7.6% to S$695.4 million, driven by strong growth in currencies and commodities derivatives as well as foreign exchange (FX) products, while equity derivatives revenue eased slightly.
SGX’s dividend per share has increased steadily year after year, reaching S$0.375 per share for FY2025.
With the share price at S$18.30, SGX offers a yield of about 2%.
SGX’s mix of diverse income streams and disciplined capital management should keep those dividends growing.
What Investors Should Watch Next
One key area investors should keep an eye on is whether recent profit growth was driven by one-off gains or structural, long-term trends.
Investors should also monitor dividend payout ratios to ensure distributions remain well-supported by underlying earnings.
Furthermore, balance sheet strength remains critical as companies navigate shifting interest rates and evolving economic conditions.
Over the long run, it is sustainable profit growth that power reliable dividends.
Get Smart: Profits Power Dividends
Robust earnings and rising dividends often signal a healthy business.
However, experienced investors do not focus on a single year of growth in isolation.
The more important question is whether a company possesses the fundamental strength to keep delivering those profits consistently over time.
Sitting on cash while blue chips climb feels painful. Buying overpriced dividend stocks feels reckless. But did you know that there’s a third option most income investors miss entirely? David Kuo reveals it in a free webinar on 25 March, with real SGX portfolio examples. Save your free spot here.
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Disclosure: Joseph G. does not own shares in any of the companies mentioned.
