New investors may feel overwhelmed by the sheer number of options on offer: Singapore’s stock market alone is home to around 600 companies.
Unfortunately, some make the mistake of jumping straight into risky or unfamiliar counters, based on stock market tips they hear or read about.
They would be better served by starting their investment journey with simple, established businesses.
A good first stock is one with an easy-to understand business model, track record, and consistent – and hopefully growing – profits and cash flows.
This article outlines five types of stocks that beginner investors can look at first to learn how investing works — without unnecessary complexity.
DBS Group Holdings (SGX: D05)
DBS, Singapore’s largest bank, is the bluest of blue chip companies.
It makes money from making loans, charging fees and commissions for activities like wealth management, and from other activities like trading.
It is profitable, pays out good dividends, and offers stability even in tough economic times.
Apart from the price-to-earnings (P/E) ratio, investors should also look at the bank’s price-to-book ratio (P/B) and its dividend yield when deciding whether to invest.
DBS offers strong management, a utility-like business, and also growth potential through its presence in large fast-growing markets such as China, India, and Indonesia.
However, it may be difficult for DBS to grow its income materially in a falling interest rate environment.
The stock is also already very highly-valued (with a P/B ratio of around 2.5, which is a 10-year high) and this may limit its upside.
Even then, investors who buy and hold this Singapore stalwart for the long term are unlikely to lose money, as DBS continues to reward investors with increasing dividend payouts.
CapitaLand Integrated Commercial Trust (SGX: C38U, CICT)
Apart from banks, REITs also pay out good dividends to investors,
In Singapore, they don’t get any bigger than CICT, which owns a portfolio of instantly-recognisable retail and office assets, mostly in Singapore.
These include ION Orchard, CapitaSpring, and Raffles City Singapore.
First-time investors can consider investing in REITs because their business model is easy to understand – tenants pay rent, most of which is then distributed to unitholders.
Depending on a REIT’s portfolio, investors could also easily visit a REIT’s properties to get a sense of how they are performing.
Key performance metrics to look at include the distribution yield, distribution per unit, gearing ratio, occupancy rate, and weighted average lease expiry.
However, REITs are not without risks.
Debt is inherent to their business model, and higher interest rates typically send unit prices lower, as more income needs to go to paying interest on the debt.
Nevertheless, the easy-to-understand business and cash returns make them a good investment for first-time investors.
Singapore Airlines (SGX: C6L)
Singapore Airlines needs no introduction.
Many investors would have flown with the city state’s premium national carrier before ever owning any stock in it.
The business model is relatively simple: the airline makes money from passenger ticket sales, cargo operations, and ancillary income, such as from in-flight sales and the KrisFlyer loyalty programme.
Some metrics to familiarize yourself with the operations of the airline include passenger load factor, revenue per available seat kilometre, and cargo load factor.
Although Singapore Airlines is one of the most profitable companies among airlines, the sector as a whole hasn’t always been a good investment.
Competition is fierce, spikes in the price of oil will eat into profits, and the travel industry is especially prone to geopolitical disruption or global shocks such as the Covid pandemic.
However, Singapore Airlines is a best-in-class company, and certainly merits a closer look from first-time investors who want to learn about a company they are already familiar with.
Sembcorp Industries (SGX: U96)
New investors can also consider investing in utility companies, which provide predictable and stable returns.
One such player is Sembcorp, which has an energy portfolio of 25.1 GW at the end of 2024, spanning 11 countries, mostly in Asia.
Most of Sembcorp’s energy portfolio are in renewable energy sources, such as wind and solar, although gas and diesel-fired plants still form a significant part.
Sembcorp is a good investment for rookie investors because it tends to have long-term contracts with customers, providing stable recurring income that can be used to reward shareholders with dividends.
Although utilities are low-risk propositions, Sembcorp recently announced the acquisition of Australia’s Alinta Energy, and is taking on significant debt to do the deal.
Although management does not expect Sembcorp’s dividend to be impacted, higher interest payments may eat into the company’s net income margin.
ST Engineering (SGX: S63)
Greater geopolitical uncertainty and increasing aggression from global superpowers are a tailwind for the shares of a company such as ST Engineering, which has a portfolio spanning aerospace, smart city, defence, and public security.
Apart from riding macro trends, ST Engineering’s investors also benefit from strong growth.
In 2024, its revenue of S$11.3 billion was 12% higher than in 2023, which resulted in net profit rising by 20% to S$702 million.
ST Engineering followed up with a 9% increase in revenue to S$9.1 billion in the first nine months of 2025.
Beyond the top and bottom line, investors should also look at ST Engineering’s order book, which indicates the total value of contracted projects it has secured, but not yet recognised as revenue.
This was valued at S$32.6 billion as of 30 September 2025.
ST Engineering’s shares have been on a run recently, and are up by around 100% over the past year.
However, that also means that they are now trading at a relatively high P/E ratio of 39, more than twice the 17x multiple for the overall Singapore market.
Get Smart: Start Simple, Stay Invested
Just as Rome wasn’t built in a day, your investment portfolio will take time to build.
Laying a good foundation is key – your first stocks should help build confidence, not anxiety.
These five simple, stable businesses, a few of which you can physically visit or whose services you use, make the best teachers for a long-term investing journey.
Once you have bought shares in these companies, pay attention to their earnings updates and announcements.
Learn as much as you can about their businesses and the industries they are in, instead of obsessing over the daily share price.
Over time, this will help you build your skill as an investor.
First-time investors: We’ve finally released our Beginner’s Guide. Read it in an afternoon, follow the principles, pick an investing style and buy your first SGX stocks within the next few hours! Click here to download it for free.
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Disclosure: Silas owns shares in DBS and CapitaLand Integrated Commercial Trust.
