Inflation, where prices climb annually, is a sneaky phenomenon.
A moderate amount can weaken your purchasing power over time, and even damage your long-term wealth generation if your investments do not keep pace.
The best way to counteract this is to own businesses that are resistant to inflation.
Today, we take a look at five types of stocks in Singapore that may help preserve your purchasing power over time.
Sheng Siong Group Limited (SGX: OV8), or Sheng Siong — Consumer Staple with Pricing Power
Providing everyday groceries allows Sheng Siong to mitigate inflation by gradually rising prices on its products, passing on higher costs to consumers.
Looking at the high inflation years of 2022 to 2023, Sheng Siong managed to post resilient revenue growth and stable gross margins.
Its gross profit margin increased from 29.4% in FY2022 to 30.5% in FY2024, demonstrating an ability to optimize its sales mix and manage supply costs even as global food prices fluctuated.
Furthermore, despite rising utility and labor costs, the group’s net profit grew to S$137.5 million in FY2024, a clear sign that its essential-goods focus acts as a natural hedge when consumer wallets are squeezed.
The key takeaway is that the essential demand for everyday necessities provides pricing power to the company.
Parkway Life REIT (SGX: C2PU) — REIT With Built-In Rental Escalations
Parkway Life, with its ownership of nursing homes and hospitals, also benefits from essential demand that does not fade during periods of inflation.
However, further solidifying the REIT’s ability to withstand inflation lies in its lease structures.
Parkway Life’s leases are triple net, which means they are not affected by inflation-related escalating expenses such as property insurance and property operating expenses.
Additionally, their leases have an annual step-up in rents tied to the consumer price index (CPI), or inflation.
With a weighted average lease to expiry of 14.49 years, alongside robust occupancy rates nearing 100% across all its properties, the healthcare REIT is well-positioned to counteract inflation.
The main point for investors to note is that contracted rent increases, tied to inflation, can help offset higher costs.
Credit Bureau Asia Limited (SGX: TCU) — Infrastructure or Utility-Like Business
Next on the list, we have Credit Bureau Asia Limited.
The group’s business is simple: provide credit information on individuals or businesses, and as well as non-financial data to customers, to help lenders and corporations manage risk.
This provision of credit reports typically has a relatively predictable demand, best seen in the group’s ability to steadily grow revenue even during the high inflation years of 2022 to 2023.
In FY2024, the company delivered a 10% year-on-year (YoY) revenue growth to reach S$59.7 million in FY2024.
Even more vital for inflation-conscious investors is the group’s immense profitability, characterized by a Net Profit Before Tax (NPBT) margin of 51% in FY2024.
Such high margins provide a massive cushion against rising internal operating costs, such as staff salaries or IT infrastructure.
Furthermore, Credit Bureau’s competitive advantage is entrenched by strict regulations, as only licensed bureaus can provide the reports necessary for official credit assessment.
This regulatory moat, combined with an asset-light business model that converted S$11.2 million into net profit for shareholders in FY2024, makes it a formidable candidate for wealth preservation.
When a business is both a regulatory necessity and a high-margin operator, it possesses a natural immunity to the eroding effects of rising prices.
Keppel Infrastructure Trust (SGX: A7RU), or KIT – Inflation-Linked Essential Services
KIT acts as a natural inflation hedge by owning critical assets like power plants and water treatment facilities.
Unlike typical commodity stocks, KIT is shielded from volatility: over 80% of its revenue is protected by long-term, inflation-indexed contracts.
This allows the trust to pass through rising costs automatically, ensuring stable cash flows.
The trust’s resilience is evident in its FY2025 results, where distributable income rose 24.4% YoY to S$249.5 million.
This performance was bolstered by record results in its energy and distribution segments, which helped maintain a stable distribution per unit (DPU) of S$0.0394.
By providing essential services with built-in price adjustments, KIT converts economic activity into reliable distributions, effectively protecting investor purchasing power as prices rise.
Venture Corporation Limited (SGX: V03) — Dividend grower with Strong Cash Flow
Rounding things off, you can consider a consistent dividend grower to add to your inflation-resistant portfolio.
Introducing Venture, a global provider of technology products, services, and solutions.
Since 2016, the group has consistently paid an annual dividend.
After holding its dividend steady for several years, the group signaled a new phase of growth by raising its FY2025 total dividend to S$0.80 per share, which included a 5-cent special dividend.
This payout is underpinned by an exceptionally robust balance sheet, featuring zero debt and a net cash position of S$1.28 billion as of end-2025.
For investors, a solid dividend payer, with a massive cash cushion and a renewed commitment to increasing distributions serves as an excellent tool to offset some inflationary pressures and grow long-term wealth.
What Investors Should Watch During Inflationary Periods
During periods of higher prices, investors should pay more attention to operating margins; a shrinking margin suggests a company is failing to pass on rising costs.
Furthermore, monitor interest coverage ratios (ICR), as inflation often leads to higher interest rates that can spike debt-servicing costs.
A ratio above 5.0x generally indicates a healthy buffer.
Lastly, evaluate the company’s ability to grow dividends during times of higher prices.
Get Smart: Own Businesses That Adjust, Not Just Endure
The best protection against inflation is owning companies with proven pricing power and the ability to grow income during times of rising prices.
Avoid the common mistake of chasing companies with high yields or assuming all REITs are inflation-proof.
Focus on business resilience and the structural ability to raise prices; that’s the sure-fire way to preserve and grow your purchasing power in any economic climate.
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Disclosure: Wilson.H does not own shares in any of the companies mentioned.
