As February 2026 approaches, income investors eyeing these three dividend payers face a mixed picture.
One company stands out for dividend confidence with a debt-free balance sheet.
Another holds steady despite heavy investment spending.
The third raises its payout even as profits slip.
Here’s what dividend investors need to know about the sustainability of these upcoming payments.
Kimly (SGX: 1D0) – The Dividend Standout
Kimly Limited stands as one of Singapore’s premier coffee shop operators, managing an extensive network of 86 food outlets, 176 stalls, and several restaurants.
In the fiscal year ending 30 September 2025 (FY2025), the group achieved a revenue of S$322.1 million, up 0.9% year on year (YoY), while net profit remained stable at S$33.3 million.
This steady performance was bolstered by improved gross profit margins, which successfully offset rising finance costs associated with lease renewals.
The balance sheet tells the real story.
As at 30 September 2025, Kimly held cash of S$68.1 million against debt of just S$5.0 million after fully repaying four bank loans during the year.
This net cash position of over S$63 million gives management ample flexibility to maintain – or even grow – dividends.
Although free cash flow decreased to S$55.3 million in FY2025, this was primarily due to a strategic S$30.0 million investment in property acquisitions at Serangoon Central and Yishun Ring Road.
These moves aim to anchor the group’s long-term presence in key heartland locations.
Investors can look forward to a final dividend of S$0.010 per share, bringing the total annual distribution to S$0.020.
At a share price of around S$0.43, this represents a trailing dividend yield of approximately 4.7%.
The dividend’s sustainability is considered high, as current cash flows and a nearly debt-free position provide ample coverage and a significant buffer against F&B sector headwinds like rising manpower costs.
Management’s willingness to invest in property acquisitions while maintaining dividends signals confidence in the business.
Fraser & Neave (SGX: F99) – Steady Hand Despite Heavy Investment
Fraser and Neave, or F&N, is an established Southeast Asian consumer group with a dominant presence in beverages, dairies, and publishing.
In FY2025, the group achieved a 7.4% YoY revenue increase to S$2.32 billion, fueled by strong canned milk sales and the expansion of its beverage portfolio.
However, attributable profit declined 6.4% to S$141.3 million, primarily due to one-off restructuring costs and goodwill write-offs, while core profits remained largely flat.
Here’s the critical number for dividend investors: Free cash flow fell sharply to S$7.3 million from S$110.2 million a year ago as capital expenditure doubled to S$223.9 million.
These funds are being directed toward long-term growth projects, including an integrated dairy farm in Malaysia and a new plant in Cambodia.
While the balance sheet remains adequate with S$363.5 million in cash, the group carries S$1.09 billion in total borrowings – adequate but not as comfortable as Kimly’s position.
Despite the cash flow squeeze, F&N maintained its total annual dividend at S$0.055 per share, offering a trailing yield of approximately 3.4% at a share price of S$1.60.
The ex-dividend date falls on 30 January 2026.
The dividend sustainability verdict is placed on a watchlist; while the decision to maintain payouts signals management confidence, the dividend’s long-term security depends on these major infrastructure investments delivering improved returns as they scale up in 2026.
Thai Beverage (SGX: Y92) – Cash Flow Trumps Profits
Thai Beverage, Southeast Asia’s largest beverage company, manages a diverse portfolio across spirits, beer, food, and non-alcoholic drinks, while holding controlling stakes in Vietnam’s SABECO and a 69.65% interest in Fraser and Neave, Limited.
For FY2025, the group reported a 2% decline in revenue to THB 333.3 billion and a 7% drop in net profit to THB 25.4 billion.
This softness was largely driven by a 14% revenue slide in the Vietnamese beer market and a strategic share swap that reduced contributions from its interest in Frasers Property Limited.
Yet here’s the counterintuitive part: Thai Beverage raised its dividend despite falling profits.
Free cash flow jumped 13% YoY to THB 32.4 billion.
Strong working capital management lifted operating cash flow by 21% YoY to THB 46.0 billion, a reminder that dividends are paid from cash, not accounting profits.
As at 30 September 2025, Thai Beverage held THB 43.8 billion in cash against total debt of THB 227.5 billion – the weakest balance sheet ratio of the three companies featured.
Thai Beverage declared a total dividend of THB 0.62 per share for FY2025, up from THB 0.60 in the prior year.
Following an interim payment last year, a final dividend of THB 0.47 per share has been declared with an ex-dividend date of 5 February 2026 and payment scheduled for 27 February 2026.
At the current share price of around S$0.48, the group offers a trailing dividend yield of approximately 5.2%.
The dividend sustainability verdict for Thai Beverage is cautiously optimistic, as the THB 32.4 billion in free cash flow provides comfortable coverage for the current payout.
While the 13% improvement in cash generation is an encouraging sign of operational efficiency, the company’s elevated debt levels require ongoing monitoring from investors.
Ultimately, the long-term security of the dividend will depend on management’s ability to reverse recent revenue declines through sustained operational improvements in the coming year.
Get Smart: Follow the Cash
These three dividend payers illustrate a fundamental investing principle: free cash flow, rather than headline profit, is the true lifeblood of sustainable distributions.
Kimly stands out as the most secure pick due to its near debt-free balance sheet and robust cash generation.
Thai Beverage provides a compelling case for looking beyond earnings, as its improved cash flow supported a dividend hike despite softer profits.
Meanwhile, F&N’s heavy capital expenditure into dairy infrastructure places it in a transition phase where future returns must eventually justify the current cash squeeze.
For income seekers, the decision to hold these stocks through their February ex-dividend dates should hinge on three factors: payout coverage, balance sheet resilience, and the quality of management’s growth investments.
By these metrics, Kimly offers the highest level of confidence, Thai Beverage demonstrates surprising operational strength, and F&N remains a story of long-term potential that requires diligent monitoring.
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Disclosure: The Smart Investor does not own any of the stocks mentioned.
