A generous dividend yield is only as trustworthy as the balance sheet standing behind it.
For income investors eyeing alternatives to the 2.5% CPF Ordinary Account (OA) rates, the real test is not the headline percentage, but whether the payout is backed by recurring free cash flow and a cash-rich balance sheet.
Three non-STI names clear the cash-rich bar – each closed its latest reporting period with a sizeable net cash position and no meaningful debt to worry about.
However, as any seasoned investor knows, a dividend is only as good as the cash flow funding it.
A closer look at their numbers reveals that the quality of these payouts sits on a spectrum: from textbook sustainability to dividends that are leaning a little more heavily on past reserves.
HRnetGroup (SGX: CHZ) – The Cash-Rich Staffing Specialist
HRnetGroup offers perhaps the cleanest story of the three.
As a dominant recruitment and staffing player across Asia, the group is a prime example of a capital-light business that efficiently converts its earnings into actual cash.
For the full year ended 31 December 2025 (FY2025), revenue rose 3.0% year on year (YoY) to S$584.0 million, powered by a 3.2% gain in its Flexible Staffing arm as average monthly contractors grew 5.6% to 16,421.
Profit attributable to owners jumped 15.0% to S$51.2 million, supported by a S$6.9 million rise in other income and disciplined cost control.
Crucially, free cash flow climbed 5.3% YoY to S$52.0 million – more than enough to cover the S$0.042 total dividend, which was itself raised 5.0% from a year ago.
Behind the payout sits a balance sheet with S$262.9 million in cash and zero debt.
At its closing price of S$0.75, HRnetGroup’s shares carry a trailing dividend yield of 5.6%.
Looking ahead, management is pivoting Professional Recruitment towards higher-value senior executive search and building recurring revenue through Octomate, its workforce-management platform – early signs that the dividend engine has room to keep running.
Credit Bureau Asia (SGX: TCU) – Resilience in a Quiet Market
Credit Bureau Asia, or CBA, which operates credit bureaus in Singapore, Cambodia and Myanmar alongside a commercial risk information business, is a classic example of what dividend resilience looks like when earnings hit a temporary speed bump.
FY2025 revenue edged up just 0.7% YoY to S$60.1 million.
The Financial Institution Data segment grew 3.0% to S$28.0 million on higher credit applications and monitoring services, partly offset by a 1.3% dip in Non-FI Data revenue.
Profit attributable to owners slipped 4.4% to S$10.7 million, dragged by lower interest income, reduced contributions from the Cambodia joint venture and higher employee costs.
Yet the dividend was not only preserved – it was increased.
CBA declared a total dividend of S$0.042 per share for FY2025, up from S$0.040 a year ago.
This move isn’t reckless; it’s backed by a balance sheet that is effectively a fortress.
The group remains debt-free and sits on S$71.2 million in liquid holdings.
Even with free cash flow softening slightly to S$27.2 million, the dividend remains well-covered.
With the Cambodia joint venture showing signs of a turnaround in the second half of 2025, the group’s “toll-bridge” business model – where it collect fees every time someone applies for credit – continues to look like a sturdy alternative for those seeking passive income.
QAF Limited (SGX: Q01) – A Dividend Anchored by Cash
QAF’s full-year result is where the dividend conversation gets more nuanced.
For FY2025, revenue edged marginally lower YoY to S$633.6 million, though it would have risen 1% on a constant-currency basis.
Net profit attributable to owners climbed 15% YoY to S$39.8 million – a headline reading that deserves a closer look.
The lift was powered largely by QAF’s share of profits from Malaysian joint venture Gardenia Bakeries (KL), which surged to S$15.4 million from S$4.7 million a year ago.
Within that figure sat an S$8.7 million non-cash impairment reversal – a one-off that flatters the underlying earnings picture.
Free cash flow tells a softer story, falling 23% YoY to S$35.4 million on higher working capital needs.
Even so, the dividend is comfortably covered.
The bakery group proposed a final dividend of S$0.04 per share, bringing the FY2025 total to S$0.05 when combined with the earlier S$0.01 interim – unchanged from a year ago.
At a recent share price of around S$1.06, QAF shares sport a trailing dividend yield of roughly 4.7%.
What ultimately anchors the payout is the balance sheet.
QAF ended FY2025 with S$214.1 million in cash against just S$4.8 million of debt (excluding lease liabilities) – a stronger net cash position than a year ago.
Management expects 2026 to remain uncertain with elevated downside risks, though raw material costs have broadly stabilised.
Get Smart: Capacity Versus Quality
Free cash flow is the lifeblood of dividends, and net cash is the safety net when that flow thins.
All three names clear the first hurdle: their latest-reported payouts are fully covered by the cash they generate.
HRnetGroup and Credit Bureau Asia provide the ideal combination – growing or steady operations that underwrite a stable-to-rising payout, all backed by sizeable cash buffers.
QAF’s dividend remains covered, but the quality of that coverage has weakened: headline earnings are flattered by a one-off impairment reversal, and free cash flow fell 23% YoY.
For fellow investors chasing yield above CPF rates, the headline number is only the starting point.
The quality of the cash flow behind it is what keeps the cheque arriving year after year.
It’s not just your imagination – filling up the tank is hitting the wallet harder than it has in years. With oil prices whipsawing and the NASDAQ behaving like a roller coaster, “paralysis by analysis” is a real risk for investors right now. Secure your seat at our upcoming free webinar to see how we manage cash and pick winners while the headlines are screaming “Correction.”
While your friends debate which tech stock to buy next, money is quietly flowing into these 5 Singapore companies you see every day. They are proven to have steady dividends and strong balance sheets. Our FREE report shows you exactly which ones and why they’re safer than flashy darlings everyone’s chasing. Download your free report now.
Follow us on Facebook, Instagram and Telegram for the latest investing news and analyses!
Disclosure: Calvina L. does not own any of the stocks mentioned. Chin Hui Leong contributed to the article and owns shares of HRnetGroup and CBA.
Leave a comment