With interest rates easing, dividend stocks are becoming more attractive as yields begin to outpace fixed income alternatives.
However, not all dividend stocks will benefit equally.
Today, we examine five dividend stocks that are uniquely positioned to shine as interest rates fall.
Why Falling Rates Matter for Dividend Stocks
Lower interest rates provide an immediate tailwind for capital-heavy sectors like REITs and Utilities by reducing borrowing costs.
This effectively slashes debt-servicing expenses, allowing the savings to flow directly to the bottom line and pad net profits.
More importantly, as yields on “risk-free” government bonds wither, steady 3-5% dividend yields becomes an irresistible magnet for income-starved capital.
This fuels an upward valuation re-rating, allowing savvy investors to capture meaningful capital appreciation alongside their quarterly checks.
PropNex Limited (SGX: OYY) – Singapore’s Leading Real Estate Service Provider
Lower interest rates have an outsized benefit for PropNex; as rates decline, property value and transactions increase.
With the most agents and the largest market share, PropNex has grown revenue at a compound annual growth rate (CAGR) of 16.9% from S$513.5 million in 2020 to S$1.04 billion as of the last 12 months (LTM) ending 30 June 2025.
Operating cash flows followed a similar trajectory, rising at an 11.1% CAGR to S$67 million in the same time period.
Since 2019, PropNex’s annual dividend has shown remarkable growth.
Full-year ordinary dividend rose from S$0.0175 in 2019 to S$0.0775 in 2024 – a 343% increase.
This momentum continued into 2025, with a declared record interim dividend of S$0.05 in August, more than doubling the interim payout from the previous year.
PropNex does not carry any debt on its balance sheet and has S$136.8 million in cash as at 30 June 2025.
With its business likely to improve given lower rates, PropNex is well-positioned to continue growing its cash flows and dividends.
Centurion Corporation Limited (SGX: OU8) – Workers and Students Accommodation Provider
Centurion Corporation Limited, or Centurion Corp, owns a portfolio of workers’ dormitories and student accommodations.
The company is rapidly evolving into an asset-light manager following the spinoff of its REIT, trading heavy property ownership for steady recurring management fees.
Additionally, the group is committed to growing its assets by pursuing accretive acquisitions.
Falling interest rates directly benefit Centurion Corp: reduced debt-servicing costs directly enhance net profits, increased portfolio value strengthens its net asset value, and a lower cost of capital makes strategic acquisitions more accretive for the group.
Since 2020, Centurion Corp has grown its annual turnover from S$133.2 million to S$358.7 million as of LTM ending 30 June 2025.
During the same time period, operating cash flow grew from S$60.5 million to S$170.8 million.
With a clean balance sheet and a low 10% net gearing ratio, the group is well-placed to refinance its S$713 million debt total borrowings of S$713 million, directly boosting its bottom line.
Furthermore, Centurion Corp has a decent history of growing its dividend, from S$0.01 in 2022 to S$0.04 in 2025.
UOB Kay Hian (SGX: U10) – Ride the Boom in Singapore Financial Markets
UOB Kay Hian (UOBKH) is a regional financial services provider offering broking services alongside corporate advisory and fundraising services.
Lower rates usually lead to a boon in capital markets activity as cheaper financing costs
encourage borrowing and investing, which directly plays into UOBKH’s hands.
With the SGX initiatives set to boost Singapore’s capital market activities, this financial group might have a banner year ahead.
Since 2020, turnover rose from S$536.6 million to S$654.9 million as of LTM.
Net income fared slightly better, rising from S$159.4 million to S$209.5 million in the same time span.
While the dividend payout history has been volatile – dividend for the full year ending 2022 (FY2022) saw an annual dip of 32% – the overall trend is positive.
FY2024’s dividend of S$0.119 per share marks a new all-time high for the group – a 25% increase over the S$0.095 payout seen at the start of the current growth cycle in FY2020.
The combination of lower rates and SGX initiatives could power the stock ahead for 2026.
CapitaLand India Trust (SGX: CY6U) – Capitalising on a Possible India Rebound
CapitaLand India Trust (CLINT) owns a portfolio of industrial assets in India.
Unlike domestic REITs, it deals with the high-interest-rate environment of the Indian market.
As at 31 October 2025, the trust has a gearing ratio of 40.9% and an average cost of borrowing of 5.8%, with 77.2% of total borrowings denoted in fixed rates.
As rates soften, CLINT could refinance its debt to boost distribution income and distributions to shareholders.
Revenue rose at a CAGR of 9.7% from 2020 to S$291.1 million as of LTM.
While net profit surged at a 27.6% CAGR to S$390.7 million (for the LTM), this figure was heavily inflated by one-off revaluation gains and tax reversals.
Distributable income, which grew at a steady 1.1% CAGR to approximately S$118 million for the LTM, highlights a resilient operational core despite significant currency headwinds and high interest costs.
However, recent distributions have been lacklustre, with distribution per share (DPU) dropping from S$0.0883 per share in 2020 to S$0.0684 per share in 2024.
CLINT might grow its DPU, benefiting from lower interest costs while reducing its leverage concurrently.
Sasseur REIT (SGX: CRPU) – A Play on China’s 2026 Consumer Focus
Sasseur REIT specialises in the retail outlet mall scene in China.
As of 30 September 2025, Sasseur maintains a low aggregate leverage of 25.5%, with a weighted cost of debt of 4.6%.
Sasseur could benefit from lower financing costs in a falling rate environment, which could boost the trust’s distributable income to shareholders, and increase the valuation of its assets.
The Chinese retail operator’s revenue has been relatively flat since 2020, fluctuating between S$120 million to S$125 million due to the depreciation of the RMB against the SGD.
Yet, net income grew from S$47 million in 2020 to S$63.2 million as of LTM.
DPU declined modestly from S$0.0654 per share in 2020 to S$0.06082 per share in 2024.
However, with the Chinese government intending to boost consumer spending for 2026 and a lower interest rate environment, Sasseur REIT could benefit greatly.
Get Smart: Let Rates Work with Quality
While falling rates could increase the appeal of dividend stocks, the biggest beneficiaries will be the quality companies with the ability to generate solid cash flows.
As interest rates decline, pay attention to the following: dividend coverage, the cash-generating ability, debt maturity profile and interest rate sensitivity of your companies.
Remember, dividend sustainability remains key.
Don’t let market uncertainty hijack your financial dreams. While headlines scream gloom, 5 Singapore companies have been quietly building wealth and paying reliable dividends. You’re probably overlooking them. Discover these resilient giants and their secrets to sustained income, even through global storms. Click here to download your free report now and secure your financial future!
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Disclosure: Wilson.H does not own shares in any of the companies mentioned.
