Recent volatility in the price of gold is a reminder that even this safe haven asset isn’t immune from market turbulence.
Gold doesn’t yield anything, and its value is based on its scarcity and market perception.
As Chinese New Year rolls around, investors looking for an alternative can consider investing in a portfolio of stocks that pay regular dividends that won’t swing with market fluctuations: Call this a prosperity portfolio.
With careful selection, such a portfolio can quietly deliver growing dividends over the long term.
What is a Prosperity Portfolio?
True prosperity comes not from speculation, but from long-term compounding of a resilient income stream.
Generally, these come from companies that have strong cash flow generation, a proven track record of paying dividends, and durable competitive advantages.
When analyzing a company’s ability to fund its dividend, investors should look at the consistency of its free cash flow.
This will ensure that dividends are funded by cash generated from its operations, and not debt.
Investors should also analyze a company’s balance sheet – generally, a lower leverage and healthy interest coverage ratio are signs that a company can continue to pay dividends sustainably.
Finally, investors should look to previous periods of economic volatility to see how the company reacted: Did it maintain payouts or cut the dividend?
While a commitment to increasing dividends is generally positive, there are moments where it might not make sense, and the wiser thing to do for shareholders is actually to cut the dividend.
However, this should only occur in exceptional circumstances.
With that, here are three stocks you can consider holding in your prosperity portfolio.
Singapore Exchange Ltd (SGX: S68)
Singapore Exchange, or SGX, can serve as your prosperity portfolio’s anchor, given its status as a blue chip stock that has paid a reliable, progressive dividend over the last 16 years.
The multi-asset exchange provides listing, trading, clearing, settlement, depository, data and index services.
It currently offers a dividend yield of 2.1%, and a trailing payout ratio of 68% – meaning that 68% of its trailing net income is paid out as dividends to shareholders.
It also has an excellent track record, paying out either steady or increasing dividends in each of its financial years from FY2009 to FY2025.
This is supported by a business that steadily increased free cash flow by more than 50% from S$502 million in FY2021 to S$774 million in FY2025.
SGX’s free cash flow in the first half of FY2026 was also down just slightly from S$347 million a year ago to S$329 million.
A high return on equity (33.9% in FY2025) and a low gearing ratio (0.3) means that SGX’s dividends are likely to be safe even if macroeconomic conditions deteriorate.
Also, as SGX has a monopoly over Singapore’s equity markets, the company is likely to benefit from the government’s ongoing policies to support this sector.
Singapore Technologies Engineering Ltd (SGX: S63)
Singapore Technologies Engineering, or ST Engineering, is the next candidate for inclusion in your prosperity portfolio, playing the role of an income grower.
Its current dividend yield of 2.3% may be relatively low, but the potential to grow its dividend is high as demand for its products and services increases.
The company is a global technology, defence, and engineering group with segments such as Commercial Aerospace, Defence and Public Security, and Urban Solutions & Satcom.
As such, ST Engineering is likely able to ride on structural tailwinds from increased defense spending as geopolitical tensions rise.
Continuing growth in the aviation industry should also raise demand for its maintenance, repair and overhaul business under the Commercial Aerospace segment.
ST Engineering’s dividend has either held steady or risen between 2017 and 2024.
For 2025, the dividend is expected to inch up to S$0.18 per share from 2024’s S$0.17.
In addition, for 2025, the company will pay shareholders a special dividend of S$0.05 per share, following an influx of S$594 million in cash from divestments.
Based on a share price of S$10.11 as of 9 February 2026, this special dividend boosts the stock’s yield to 2.3%.
Looking forward from 2026 onwards, ST Engineering intends to pay out one-third of its year-on-year (YoY) increase in net profit as incremental dividends, tying the dividend directly to profitability.
All these said, ST Engineering’s balance sheet is on the weak side.
As of 30 June 2025, it has S$354 million in cash and S$5.5 billion in debt, but ST Engineering makes up for this with robust free cash flow.
It has generated positive free cash flow in each year from 2014 to 2024, except for 2022. In 2024, ST Engineering’s free cash flow was S$1.2 billion, nearly double from 2023.
The first half of 2025 saw the company generate S$513 million in free cash flow, down by just 10% from a year ago.
Sembcorp Industries Ltd (SGX: U96)
The final block of your prosperity portfolio should be a defensive income play – a business that can remain resilient even during downturns.
Sembcorp is a global utilities player, providing essential services including energy and water.
Its portfolio spans Europe, Asia, and Australia, with a combination of both gas and renewable assets.
Its trailing twelve months dividend yield of 4.1% is the highest of the three stocks.
Its dividend per share has increased by nearly 6x from S$0.04 per share in 2020 to S$0.23 in 2024.
In the first half of 2025, Sembcorp’s interim dividend was up by 50% YoY to S$0.09 per share.
Recently, Sembcorp acquired Australian utility Alinta Energy, a deal which delivers immediate earnings accretion.
Although Sembcorp did have to take on a significant amount of debt (S$6.1 billion) for the deal, management has commented that the company will be able to sustain its dividend and there may even be “further growth potential.”
It also helps that Sembcorp and Alinta Energy have both been generating robust cash flow in recent years.
From 2020 to 2024, Sembcorp had generated positive free cash flow in each year, with an average annual free cash flow of S$1.5 billion.
As for Alinta Energy, its operating cash flow was positive in each year for the same period, and had averaged S$845 million per year.
In the first half of 2025, Sembcorp’s free cash flow jumped 42% YoY to S$1.3 billion.
Constructing Your Prosperity Portfolio
When constructing your prosperity portfolio, it’s important to diversify across sectors, and avoid concentration in any single stock or industry – that’s why our choices span the finance, defence, and energy sectors.
While a stock with a higher dividend yield is generally better value, don’t be too obsessed with chasing yield.
Sometimes, that means the market thinks the dividend is unsustainable and might be cut.
Do consider reinvesting your dividends – this will ensure that your portfolio compounds over time, which is one of the essential features of long-term investing.
Over decades, this will ensure a portfolio that evolves from one that simply generates income to providing you with financial independence.
Get Smart: Start Today
Prosperity is built through ownership of businesses that consistently reward shareholders with cash.
A well-constructed dividend portfolio is made up of companies that are able to sustainably increase their dividends over time, and not just those offering the highest current yields.
With patience, your prosperity portfolio can provide you with lasting financial security over time.
So why not put some of your red pocket money into one – or all – of the stocks mentioned above?
We’ve found 5 SGX-listed dividend stocks with strong track records in turbulent markets. If you want consistency in an uncertain world, start here.
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Disclosure: Silas H. does not own shares in any of the companies mentioned.
