4 Singapore Stocks Perfect for Your CPF Investment Account

Core Investment Opportunities - The Central Provident Fund (CPF) offers safe, risk-free returns, with typical returns ranging from 2.5% per year in the Ordinary Account to 4% in the Special and Medisave Accounts [1] - The CPF Investment Scheme (CPFIS) allows investment in stocks for potentially higher returns, highlighting the importance of selecting quality stocks for CPF portfolios [1] NetLink NBU Trust - NetLink NBU Trust operates Singapore's fibre network infrastructure, benefiting from a monopoly that ensures business resiliency and predictability [2] - The trust is set to earn a government-regulated return of 7% per year on its asset value from April 2024 to April 2029 [2] - NetLink charges fixed monthly fees for residential and non-residential connections, providing visibility and predictability of earnings [3] - Since FY2021, NetLink has generated an average annual net operating cash flow of approximately S$270.4 million [3] - The dividend per share has increased by 5.5% to S$0.0536 for FY2025, with an average dividend payout ratio of 74.3% over the last five fiscal years [4] - NetLink's current share price of S$0.975 offers a trailing yield of roughly 5.50% [4] - The trust's defensive nature and predictable dividends make it suitable for CPF portfolios [5] Singapore Exchange Limited - Singapore Exchange Limited (SGX) has achieved a compound annual growth rate (CAGR) of 5.9% in revenue, growing from S$818.1 million to S$1.37 billion over the last decade [6] - Net income has increased at a CAGR of 7.1%, rising from S$349.0 million to S$648.0 million during the same period [6] - SGX has consistently paid dividends for the past decade, with the latest dividend per share increasing by 8.7% year-on-year to S$0.375 for the fiscal year ending June 30, 2025 [7] - SGX's return on equity (ROE) is currently at 31.1%, and it trades at a forward price-to-earnings (P/E) ratio of 22.4 times [8] - Recent initiatives, such as the S$5 billion Equity Market Development Programme, are expected to enhance SGX's future earnings [8] - SGX represents a combination of current income and potential capital appreciation [9] Sembcorp Industries - Sembcorp Industries is a utility company that provides portfolio resilience, with stable operating cash flows averaging around S$1.5 billion over the last three years [10] - The company has maintained a relatively stable dividend yield of 2.46% from 2021 to the last 12 months [10] - Sembcorp's ordinary dividend per share increased by 475% from S$0.04 in 2020 to S$0.23 in 2024, with the latest interim dividend up 50% from the prior year [11] - The net debt to equity ratio is elevated at 1.34, but steady earnings from long-term contracted power deals provide resilience [11] - Sembcorp's EBITDA comfortably covered interest expenses by 4.3 times in the first half of 2025, offering reliable income during uncertain times [12] DBS Group Holdings - DBS Group Holdings has seen its share price increase by 126% from S$23.60 to S$53.32 since the start of 2020, with cumulative dividends of S$9.16 per share during this period [13] - The total return over this period is 262.5%, with the ordinary dividend per share rising at a CAGR of 29.3% from S$0.78 in 2020 to S$2.22 in 2024 [13] - The average dividend payout ratio has been 49.5%, reflecting strong management and performance as the largest bank in Southeast Asia [14] - DBS is currently trading at a trailing price-to-book (P/B) ratio of 2.2, which is a premium compared to its three-year average of 1.6 [14] - DBS exemplifies long-term compounding and is recommended as a core part of a CPF portfolio [15] Investment Strategy - CPF investing is intended for long-term, diversified investments rather than short-term trading, focusing on stocks from Singapore-incorporated companies listed on the SGX Main Board [16] - Investors should consider stocks across various sectors to manage risk and focus on fundamentals such as stable earnings and healthy balance sheets [16] - High-quality blue-chip dividend companies may outperform CPF's base interest, aligning with risk tolerance and retirement goals [18] - Combining CPF's safety with disciplined equity investing can enhance retirement plans [19]