Dividends are one of the best passive income sources that you can build for your retirement.
All you need to do is park your money in reliable dividend-paying stocks and hold them over the long term.
However, you do need to filter out strong companies that can not just sustain their dividends through tough times.
You also need to determine if these businesses can increase their dividends to combat inflation.
Here are three reliable Singapore stocks that can help you build and grow your stream of passive dividend income.
Haw Par Corporation (SGX: H02)
Haw Par is a conglomerate with four key divisions – healthcare, leisure, investments, and property.
The group’s healthcare division manufactures and sells ointments and pain patches under the famous Tiger Balm brand.
Haw Par has been a consistent payer of dividends over the years, and its dividend has also been increasing.
Back in 2010, the group paid out an annual dividend of S$0.20 per share.
This annual dividend was increased to S$0.30 per share from 2018 onwards, and was then increased again to S$0.40 per share in 2023.
Haw Par also has a practice of paying out special dividends when too much cash accumulates on its balance sheet.
The group paid a special dividend of S$0.15 per share in 2015, S$0.85 per share in 2018, and more recently, S$1 per share for last year.
That’s a total of S$2 per share in special dividends dished out over the past 10 years.
There could be more to come from the healthcare player.
For 2024, revenue rose 5% year on year to S$244.8 million while net profit improved by 5.4% year on year to S$228.3 million.
That year, Haw Par launched a sensorial therapy range of new products, which enabled the group to enter the aromatherapy sector.
Tiger Balm also continued to expand its customer base in Vietnam, Indonesia and the Philippines with the launch of Tiger Balm plaster.
Should this new product line perform well, it could drive further revenue and profit increases and allow the group to continue dishing out increasing dividends.
Sheng Siong (SGX: OV8)
Sheng Siong is one of Singapore’s largest supermarket operators with 77 stores around the island as of 31 March 2025.
The group sells a wide assortment of products, including live and chilled food, daily necessities, toiletries and household items.
The retailer has demonstrated steady growth in revenue and profit over the years, with its dividend also shooting higher post-pandemic.
Sheng Siong started out by paying an annual dividend of S$0.0177 back in 2011, and this dividend doubled to S$0.0355 by 2019.
The pandemic caused the supermarket operator’s revenue and profits to surge, allowing it to pay out an annual dividend of S$0.06 and higher from 2020 to 2023.
The group continued its strong performance by reporting a 2.6% year-on-year increase in net profit on the back of a 4.5% year-on-year improvement in revenue for 2024.
The annual dividend for 2024 increased to S$0.064 from S$0.0625 a year ago.
The first quarter of 2025 (1Q 2025) saw healthy progress with net profit increasing by 6.1% year on year to S$38.5 million as Sheng Siong continued to improve on its gross profit margin.
Moreover, the supermarket operator secured six new stores, which will progressively open by 3Q 2025.
The group is also awaiting the results of four HDB tenders as it is trying to secure more new shop spaces.
With new contributions coming in from the new stores, Sheng Siong could see its revenue and profits increase in the years ahead, translating to higher dividends for shareholders.
Micro-Mechanics Holdings (SGX: 5DD)
Micro-Mechanics Holdings, or MMH, provides high-precision tools and parts used in the wafer fabrication and assembly processes of the semiconductor industry.
The group has more than 600 customers globally and operates five facilities in Singapore, Malaysia, China, the US, and the Philippines.
Management is committed to delivering long-term shareholder returns, and MMH has paid out dividends every single fiscal year since its IPO.
A total of S$1.319 in dividends per share has been paid since MMH’s listing, and this includes the periodic special dividends that were paid when times were good.
MMH was caught in the semiconductor downturn, which started in 2022, but its recent results have shown that the industry could be witnessing a strong rebound.
For the first nine months of fiscal 2025 (9M FY2025), revenue climbed 12.9% year on year to S$48.5 million.
Operating profit surged 38.8% year on year to S$12.3 million while net profit soared 54.7% year on year to S$9.2 million.
MMH is seeing capacity utilisation increase steadily while its gross margin hit 50% for its latest quarter, up from 46.4% in the prior year.
The World Semiconductor Trade Statistics (WSTS) expects 2025 global semiconductor sales to increase by 19% year on year to US$627 billion.
This growth should bode well for MMH in the coming years, and the group will pay out increasing dividends if its profits continue to grow.
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Disclosure: Royston Yang owns shares of Micro-Mechanics (Holdings).
