The Straits Times Index (SGX: ^STI) recently breached new highs, past the 5,000 level, before reversing down.
With the index near fresh highs, investors are confronted with the old, so familiar feeling of the fear of missing out (FOMO); is it too late to buy stocks now?
History shows that when indexes make new highs, further gains usually follow suit.
However, fresh highs also mean elevated valuations; your individual stock selection now matters more than ever.
In this article, we take a look at three companies that may still offer value for investors.
Singapore Telecommunications Limited (SGX: Z74), or Singtel — The Defensive Compounder
First up, we have Singapore’s most dominant telecom company: Singtel.
Prized for its resilient earnings and cash flows generated from the provision of essential telecommunication services, Singtel has long been a solid defensive compounder.
In recent years, Singtel has been making strides in diversifying its business through new digitalisation initiatives.
With new business segments such as NCS and Nxera, the group is capturing increased demand for connectivity services and data centres.
Impressively, both segments carry higher margins and already have a positive contribution to earnings.
The continuous growth of these segments should help Singtel to grow its overall earnings moving forward.
Over the past decade, the telecom operator has posted resilient earnings and cash flows, which allowed the group to pay a regular annual dividend.
For reference, the group posted S$4.6 billion in operating cash flow for its latest fiscal year ending 31 March 2025 (FY2025).
On the balance sheet front, Singtel has been reducing its net debt over the years via a combination of operating cash flows and asset divestments.
Its current leverage ratio is 1.3 times as of 30 September 2025, down from 1.6 times on 30 September 2024.
Singtel trades at a premium valuation of roughly 21.7 forward price-to-earnings (P/E) ratio, which is slightly elevated compared to its five-year historical average of 17.9 times.
However, this premium multiple might be well deserved given the stability of its core telecom business, alongside new growth engines in NCS and Digital InfraCo.
CapitaLand Integrated Commercial Trust (SGX: C38U), or CICT — The Income Anchor
CICT stands out as a reliable dividend payer, having paid an annual dividend stretching back to 2002.
This steady dividend income becomes more valuable with elevated valuations. While stock prices might correct during times of market gyrations, dividend income tends to hold up more reliably.
Having a constant income helps when markets correct, allowing you to hold onto the stock and helping you to compound dividends over time.
CICT currently offers a trailing dividend yield of 4.8%, which is slightly lower than its five-year historical average of roughly 5%.
CICT’s distribution appears to be sustainable given its widely diversified mix of properties, healthy occupancy rates, and its demonstrated ability to steadily raise rents on its tenants.
The key takeaway here is that receiving a reliable annual income reduces reliance on capital gains.
ST Engineering (SGX: S63), or STE — The Structural Growth Leader
Finally, adding a long-term growth compounder such as ST Engineering helps to balance out the previously mentioned picks.
STE still has its long-term growth drivers in commercial aerospace (CA) alongside defence and public security (DPS), which remain intact.
The group’s order book, which stands at S$32.6 billion as at 30 September 2025, provides good visibility for upcoming revenue and earnings.
With aerospace continuing its post-pandemic recovery and increased worldwide government spending on defence, ST Engineering is well-positioned to continue growing its top line and earnings.
This growth trajectory is further solidified by STE’s status as Singapore’s prime defence player.
It also shows that growth doesn’t stop just because the index is at fresh highs.
What I Am Watching at STI 5,000
With the index hovering at 5000, my focus is on whether earnings can continue to grow to justify lofty share prices.
Additionally, more attention has to be paid to valuations: are they significantly higher than long-term averages?
Finally, monitoring the strength of balance sheets is also critical to identify which firms have the liquidity to survive – or thrive – at these levels.
What I Am Avoiding
Things to avoid right now include stocks that have gone on a huge rally without earnings support, and companies that depend heavily on perfect economic conditions.
I would also not chase price momentum blindly.
Not every new high made in the stock price presents an opportunity.
Get Smart: Great Companies Don’t Expire at Round Numbers
In summary, the STI at record highs do not represent a ceiling.
Fundamentally strong companies can still compound in both capital appreciation and income generation even in such times.
Instead of trying to guess if a pullback is on the way, focus on owning quality companies.
Many Singapore stocks fall behind inflation, which means your money quietly loses strength over time. Dividend stocks have a very different track record. Some continued delivering 6% to 13% every year across the toughest market conditions.
In this FREE report, discover 5 crisis-tested dividend stocks that kept rewarding investors while the market struggled. Download your dividend investing guide now.
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Disclosure: Wilson.H does not own shares in any of the companies mentioned.
