3 Defensive Stocks to Own if Market Highs Don’t Last

Core Viewpoint - The article emphasizes the importance of defensive stocks such as Singapore Exchange (SGX), Singapore Technologies Engineering (STE), and Singapore Telecommunications (Singtel) for income investors during periods of market volatility, highlighting their stable earnings and dividends [1][17]. Singapore Exchange (SGX) - SGX is the sole stock exchange operator in Singapore, benefiting from strong recurring income from derivatives and clearing services, and high trading volumes even in volatile markets [2]. - In FY2025, SGX reported its highest revenue and net profit since listing, with net revenue growing 11.7% year on year to S$1.3 billion, driven by growth in equities, currencies, and commodities [3][4]. - The Equities – Cash segment saw a nearly 19% increase in net revenue YoY, while Equities – Derivatives and FICC segments grew by 13.8% and 8.6% respectively [4]. - Total dividend for FY2025 rose by 8.7% YoY to S$0.375 per share, with plans to enhance dividends by S$0.0025 each quarter until FY2028 [5][6]. Singapore Technologies Engineering (STE) - STE's share price reached all-time highs in August 2025, with revenue in 1H2025 growing 7% YoY to S$5.9 billion and net profit increasing nearly 20% to S$403 million [7]. - The order book reached a new high of S$31.2 billion as of 30 June 2025, supported by S$9.1 billion in new contracts secured in the first half of 2025 [8][9]. - STE declared an interim dividend of S$0.08 per share for 1H2025, with plans for a total dividend of S$0.18 per share for 2025 and a new policy to pay out about one-third of year-on-year net profit increases as incremental dividends [10]. Singapore Telecommunications (Singtel) - Singtel's financial performance for FY2025 showed group revenue steady at S$14.15 billion, while underlying net profit rose 9.3% to S$2.47 billion [11]. - A significant one-time gain from the partial divestment of its Comcentre headquarters led to a net profit surge of over 400% to S$4.02 billion [12]. - Total capital expenditure is projected at S$2.5 billion for FY2026, with S$0.8 billion allocated for investments in data centers, AI, digitalization, and satellites [14]. - Singtel proposed a total ordinary dividend of S$0.17 per share for FY2025, a 13.3% increase from the previous year, and aims to pay out a core dividend of 70% to 90% of its underlying net profit [14][15].