When a company buys back its own shares, it’s worth asking: what does that tell us about its dividends?
Over the first four months of 2026, more than 50 primary-listed companies on the SGX collectively repurchased S$911 million worth of shares, up from around S$750 million during the same period in 2025.
While the big names – Singapore Telecommunications Limited (SGX: Z74), Oversea-Chinese Banking Corporation Limited (SGX: O39) and Keppel Ltd (SGX: BN4) – dominated the headlines with a combined S$636 million in buybacks, a handful of smaller companies were quietly doing the same.
What makes these smaller names interesting is that they were buying back shares and paying dividends at the same time.
For income investors, this dual capital return can be a useful litmus test: a company that can afford to do both is signalling confidence in the durability of its cash flow.
But the quality of that signal varies.
Here are three non-STI stocks that appeared on the buyback list – and what their financials tell us about dividend sustainability.
Credit Bureau Asia (SGX: TCU)
Credit Bureau Asia (CBA), which provides credit and risk information to banks and financial institutions across Southeast Asia, delivered a quiet vote of confidence in its dividend.
The group raised its FY2025 payout to S$0.042 per share, up from S$0.040 a year ago – even as profit attributable to owners slipped 4.4% year on year (YoY) to S$10.7 million.
How can a company raise its dividend when profits are falling?
In CBA’s case, the answer lies in its balance sheet.
As at 31 December 2025, the group held S$46.5 million in cash and bank balances, plus another S$24.7 million in short-term financial assets, bringing total liquid assets to S$71.1 million – all on a completely debt-free balance sheet.
Free cash flow of S$27.2 million, while down 4.9% YoY, still comfortably exceeded the dividend obligation.
Within its core business, the Financial Institution Data segment – which runs credit bureaus in Singapore, Cambodia, and Myanmar – grew revenue 3.0% to S$28.0 million, driven by higher credit applications and monitoring services.
This recurring, subscription-like revenue base provides a steady underpinning for future payouts.
Kimly (SGX: 1D0)
Singapore’s largest traditional coffee shop operator maintained its interim dividend at S$0.010 per share for the first half of its fiscal year ending September 2026.
Revenue edged up 1.3% YoY to S$161.4 million, while profit attributable to owners rose 10.6% to S$16.4 million.
The headline free cash flow figure of S$27.0 million, however, deserves a closer look.
Kimly spent S$12.1 million acquiring a coffee shop property at 12 Haig Road during the period.
Stripping out this one-off purchase, underlying free cash flow would have been approximately S$39.2 million – a healthy number that provides ample coverage for the group’s dividend.
The balance sheet also looks solid: S$65.1 million in cash against S$10.6 million in interest-bearing borrowings, excluding lease liabilities.
Still, dividend investors should keep an eye on the margin picture.
Gross profit margin improved from 27.5% to 28.3%, but this was partly aided by S$2.3 million in Progressive Wage Credit received during the period — a government subsidy that will eventually taper off.
Management has also flagged rising costs across raw materials, utilities, rentals, and labour.
The dividend looks well-funded today, but the margin tailwinds may not be permanent.
Micro-Mechanics (SGX: 5DD)
Micro-Mechanics, a precision engineering specialist serving the semiconductor industry, posted a strong third quarter for its fiscal year ending June 2026 (3QFY2026).
Revenue surged 16.2% YoY to S$18.6 million, while net profit climbed 18.8% to S$3.8 million, propelled by robust demand from artificial intelligence, computing, and memory applications.
Yet the dividend picture requires some context.
No dividend was declared for the quarter, which is consistent with the group’s practice of paying dividends only in the second and fourth quarters.
The group holds S$25.7 million in net cash with no bank borrowings, giving it the financial capacity to fund future payouts.
The caveat for income investors is the cyclical nature of the semiconductor industry.
Free cash flow dipped to S$2.8 million from S$3.6 million a year ago, as higher working capital needs weighed on operating cash flow.
And while the World Semiconductor Trade Statistics (WSTS) forecasts global sales to grow 25% to nearly US$1 trillion in 2026, such projections have historically been subject to sharp swings.
Strong earnings today do not guarantee tomorrow’s dividend.
Get Smart: Look beyond the buyback headline
A share buyback can be a positive signal, but it’s only one piece of the puzzle.
For dividend investors, the more revealing question is whether the company can sustain its payout alongside the buyback — and the answer differs across these three stocks.
CBA’s fortress balance sheet and raised dividend tell one story.
Kimly’s solid cash flow, tempered by subsidy-aided margins and cost headwinds, tells another.
And Micro-Mechanics’ impressive growth, set against the inherent volatility of the semiconductor cycle, tells a third.
As always, fellow investors, the numbers beneath the headline are where the real insights lie.
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Disclosure: Calvina L. does not own shares of any companies mentioned. Chin Hui Leong contributed to the article and owns shares of OCBC, CBA and Micro-Mechanics.
