Yield is a siren song that often leads income investors onto the rocks.
It is easy to get swept up in a high percentage, but a payout is only as sturdy as the business engine powering it.
But a 5% yield looks identical on a screener whether it’s backed by recurring free cash flow, a freshly re-contracted rental book, or a project windfall that is already winding down.
The gap only reveals itself in the dividend statements that land a year or two later.
With that lens in mind, here are three SGX-listed names whose trailing yields have hovered near — or well above — 5%, and a look at what is actually paying for each payout.
HRnetGroup Limited (SGX: CHZ)
One of Asia’s largest recruitment and staffing specialists, HRnetGroup operates across 18 cities under brands including HRnetOne, PeopleSearch and RecruitFirst.
The business runs on two engines: Flexible Staffing, which contributed 89.7% of FY2025 revenue through contract and temporary workers; and Professional Recruitment, which accounted for just 9.6% of revenue but 45.2% of gross profit through permanent placements and executive search.
For the full year ended 31 December 2025, revenue rose 3.0% year on year (YoY) to S$584.0 million, supported by a growing pool of contractors and permanent placements.
Net profit climbed 15.0% to S$51.2 million, though that lift was flattered by a S$6.9 million jump in other income from fair value gains on financial assets and gold.
The cleaner read is free cash flow, which grew 5.3% to S$52.0 million and comfortably covered the payout.
With S$262.9 million in cash and zero debt, the balance sheet remains pristine.
FY2025 total dividend rose to S$0.042, offering a trailing yield of 5.6% at a share price of S$0.75 – a robust “money snowball” for disciplined income seekers.
Elite UK REIT (SGX: MXNU)
Elite UK REIT owns 148 predominantly freehold commercial properties across the United Kingdom, anchored by the Department for Work and Pensions (DWP), which accounts for 92.3% of rental income.
The standout development in FY2025 was a landmark lease regear with the DWP, securing £24.3 million in annual rent and extending the portfolio weighted average lease expiry (WALE) to a much more stable 7.2 years.
While revenue edged up 1.3% YoY to £38.0 million, net property income (NPI) dipped 3.7% to £36.0 million on lower dilapidation settlements and asset repositioning costs.
Distribution per unit (DPU) rose 5.6% to £0.0303, though the uplift was bolstered by interest savings and tax benefits rather than direct rental growth.
Nonetheless, occupancy remains high at 98.6% with net gearing at 40.7% and borrowing costs down to 4.7%.
As the REIT trades and distributes in sterling, Singapore-based investors should also factor in GBP/SGD movements when assessing the effective yield.
All vehicle owners will be familiar with VICOM, Singapore’s dominant vehicle inspection operator with close to 73% market share.
This subsidiary of ComfortDelGro Corporation (SGX: C52) appeared to have a blockbuster year.
Revenue in FY2025 surged 40.1% YoY to S$167.4 million and dividends stepped up to S$0.084 – a 44.8% increase.
However, investors must look more closely at the engine powering these results.
The headline growth was driven by the one-off On-Board Unit (OBU) installation project, which is now substantially complete.
Consequently, free cash flow actually fell 16.8% YoY to S$19.2 million due to heavy capex of S$39.0 million.
While the balance sheet is pristine with S$57.9 million in cash and zero debt, management expects testing demand to soften in FY2026 as that tailwind fades.
With the share price recently rallying, the focus shifts to whether the current yield is sustainable.
The upcoming integrated testing hub at Jalan Papan will be key to watch, as it should normalise capex, thereby supporting cash flow.
Get Smart: Look past the headline yield
The calls of high yield can be tempting, but as we’ve seen, not all 5% payouts are created equal.
HRnetGroup’s dividend is backed by consistent free cash flow and a fortress balance sheet, while Elite UK REIT relies on a freshly re-contracted government lease book.
Meanwhile, VICOM’s recent bumper dividend serves as a reminder that project windfalls can eventually wind down.
Free cash flow remains the lifeblood of any sustainable dividends.
When sizing up your next investment, don’t just look at the headline figure.
It is not how high that number is, but what is paying for it.
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Disclosure: Calvina L. does not own any of the stocks mentioned. Chin Hui Leong contributed to the article and owns shares of HRnetGroup and VICOM.
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