When it comes to blue-chip investing, sometimes the market tells you exactly what it values — you just have to listen.
In March 2026, three Straits Times Index (SGX: ^STI) constituents stood out as the month’s best performers: Sembcorp Industries (SGX: U96), Singapore Exchange (SGX: S68), and Wilmar International (SGX: F34).
On the surface, they couldn’t be more different — an energy giant, a bourse operator, and an agribusiness conglomerate.
But dig into their latest results, and a common thread emerges: all three saw a meaningful improvement in cash generation, which, in turn, supported higher dividends.
For dividend investors, this is the kind of signal worth paying attention to.
Sembcorp Industries: from cash burn to cash flow
Sembcorp’s FY2025 headline numbers looked underwhelming at first glance.
Revenue fell 10% year on year (YoY) to S$5.8 billion, weighed down by lower electricity offtake, weaker pool prices, and the absence of its divested waste management business.
Net profit dipped 3% to S$984 million.
But the real story was buried further down the income statement.
Free cash flow swung to a positive S$208 million, up from negative S$196 million a year earlier, as capital expenditure moderated significantly.
That’s a turnaround of over S$400 million in a single year.
With cash generation improving, management raised the total ordinary dividend to S$0.25 per share, a 9% increase from S$0.23 a year ago.
At a share price of S$6.75, this works out to a trailing dividend yield of around 3.7%.
Looking ahead, the pending acquisition of Alinta Energy — expected to complete by the end of the first half of 2026 — could further diversify the group’s earnings base and underpin dividend sustainability over time.
SGX: record trading volumes fuel dividend escalator
Singapore’s sole bourse operator continued to benefit from elevated market activity.
Net revenue for the first half of its fiscal year (1H FY2026) rose 7.6% YoY to S$695.4 million.
The standout was its Equities – Cash division, which climbed 16.2% as securities daily average traded value jumped 19.5%.
Reported net profit was broadly flat at S$342.7 million, held back by a S$15.0 million goodwill impairment related to Scientific Beta, but strip that out, and adjusted net profit rose a healthy 11.6% to S$357.1 million.
What matters for dividend investors is SGX’s strong cash generation — net operating cash flow came in at S$363.7 million for the half — and the confidence it provides.
The group lifted its interim quarterly dividend to S$0.110, bringing total dividends for 1HFY2026 to S$0.2175, up from S$0.180 a year ago.
More importantly, management has committed to maintaining a 0.25-cent quarterly dividend increase through the end of FY2028, offering investors rare dividend visibility among Singapore blue chips.
Wilmar: the turnaround the market nearly missed
On the surface, Wilmar’s results were a mixed bag.
Revenue rose 4.5% YoY to US$70.4 billion for FY2025, while reported net profit surged 20.6% to US$1.4 billion.
However, those headline numbers were inflated by a US$1.1 billion remeasurement gain from the AWL stake change, offset by US$782.3 million in Indonesia-related provisions.
Core net profit — the figure that matters — grew a more modest 9.7% to US$1.3 billion.
So why did the market reward Wilmar? The answer lies in cash flow.
Free cash flow swung to a positive US$1.3 billion, from negative US$200 million a year earlier — an improvement of US$1.5 billion.
This was driven by stronger operating cash flow and a 31.2% reduction in capital expenditure as the group’s major expansion programme nears completion.
Here’s where it gets interesting for dividend investors: despite the massive cash flow improvement, Wilmar actually cut its total dividend to S$0.14 per share, down from S$0.16 in FY2024.
At a share price of S$3.83, this translates to a trailing yield of around 3.7%.
Why the cut?
Management acknowledged that 2025 was a challenging year amid geopolitical tensions and trade tariffs, and operating conditions for 2026 are expected to remain difficult.
The lower dividend appears to be a prudent move to preserve flexibility, even as the underlying cash flow picture has improved substantially.
Should conditions stabilise, the foundations for a dividend recovery are clearly in place.
Get Smart: Follow the Cash
March’s top-performing blue chips remind us of a timeless investing principle: free cash flow is the lifeblood of dividends.
Sembcorp and Wilmar both swung from negative to positive free cash flow, while SGX’s robust cash generation underpins its committed dividend escalator through FY2028.
The market, it seems, is telling us something — when cash flow improves, share prices tend to follow.
For dividend investors, the lesson is clear: before chasing yield, check whether the business can actually generate the cash to pay for it.
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: The Smart Investor owns shares of SGX.
