Beyond DBS and S-REITs: Food Empire and HRnetGroup Deliver Record Dividends

For many Singaporean investors, the three major local banks and S-REITs are the go-to choices for passive income. Their consistent dividends provide a welcome “second income” on top of an active salary.

However, interest rates have a significant influence on their performance.

While you may argue that these two sectors complement each other, it is never a complete hedge. The impact of interest rate movements takes time to filter through their balance sheets, often leaving investors vulnerable to cyclical risks.

If you are looking for further diversification, here are two Singapore-listed companies with resilient business models that have consistently rewarded shareholders while quietly expanding their global footprints.

Food Empire (F03): A Rare Growth Story in Consumer Staples

Food Empire delivered another amazing performance for FY 2025 — its fifth consecutive year of growth.

Revenue is up by an impressive 21% YOY, hitting US$577 million, and diluted normalised EPS surged 25% to US$0.1174.

To put that in perspective, Food Empire has been growing its revenue at a compounded annual rate (CAGR) of nearly 15% from FY 2020 to FY 2024.

Its core markets, Russia and Central Asia, were the star performers last year, driving sales up by 34.8% and 25.6% respectively.

While the contribution from these regions edged up, South-East Asia and South Asia continue to contribute a solid 38% of sales, providing a healthy geographic hedge.

Record Dividends

As seen from the trend, Food Empire has a proven track record of sharing its growth.

Excluding special dividends, its declared ordinary dividends have gone up five times from S$0.016 in FY 2021 to the latest S$0.08!

In years with exceptional earnings like FY 2025, this is topped up by a significant special dividend (S$0.04), bringing the total to S$0.12.

While a another five-fold jump is unlikely, you can be reasonably assured that payouts will track the company’s growth trajectory.

Future Growth

The group isn’t sitting still.

Last year, it completed the expansion of its snack factory in Malaysia and the construction of its first coffee-mix plant in Kazakhstan.

With production kicking off in H1 2026, these facilities are poised to drive the next leg of revenue growth and margin expansion as they ramp up to full utilisation over the next 24 months.

Beyond 2026, the strategy moves “upstream”:

• India: Expanding spray-dried coffee capacity by ~60% (Expected FY 2027).
• Vietnam: New freeze-dried soluble coffee facility (Expected FY 2028).

Too Late to Buy?

Year-to-date, Food Empire’s stock price is up by nearly 40%!

For seasoned investors, I fully understand the hesitation to click “buy” after such a rally. However, if I had only looked in the rear-view mirror, I wouldn’t have reinvested last year and would have missed the current run.

So let’s look through the windscreen and assess its forward valuation with the following parameters:

• Current Price: S$3.25
• Projected Diluted EPS: S$0.17
• Projected Growth: 15%

That translates to a Forward P/E of 19x and a Forward PEG of 1.3.

The market is valuing the company pretty fairly for the moment. However, if you are confident that it can sustain a 15% average growth rate for the next five years, both capital appreciation and a rising dividend await you in the future.

HRnetGroup (CHZ): Resilient Dividends and Recovery “Green Shoots”

While Food Empire is about aggressive expansion, HRnetGroup is a story of resilience and strategic pivoting. As a leading recruitment player in 15 Asian cities, it is a prime proxy for the regional economy.

After two years of softening revenue, HRnetGroup reported a 3% YoY increase in sales to S$584 million for FY 2025.

While net profit increased by a healthy 14.3% to S$52.9 million, it is important to note this was partly boosted by a S$6.9 million increase in other income, which includes higher government grants and a net fair value gain on its investments in Staffline Group (STAF) and Gold.

I am not reading too much into that specific “Other Income” jump, as those items are often one-off or subject to market swings.

What is truly encouraging, however, are the operational shifts:

• Professional Recruitment (PR): The group’s pivot to Senior Executive Search last year has paid off. This resulted in the first increase in Gross Profit for this segment since FY 2021, proving that HRnetGroup can successfully move “up-market” where the absolute fee per client is significantly greater.
  
• International Flexible Staffing (FS): While the Singapore market remains muted, expansion in Taiwan and Indonesia (with volumes up 21% and 40% respectively) is impressive. This geographic diversification is exactly what you want to see to offset local cyclical risks.

Harvesting Dividends from a Cash Moat

Similar to Food Empire, HRnetGroup has a proven track record of rewarding shareholders.

A cash-generating business model coupled with a fortress balance sheet (S$263 million in net cash and zero debt) means they can pay stable dividends even when the business faces friction.

Crucially, HRnetGroup is willing to pay out more when the outlook improves. This year, they raised the total dividend by 5% to S$0.042. At a recent price of S$0.75, that is a very attractive yield of approximately 5.6%.

For the Future

We are now seeing the first “green shoots” from seeds planted years ago.

Octomate (their HR-tech platform) is gaining traction with major wins like Sentosa Development Corporation and Outward Bound Singapore. The synergy with the FS segment could turn this into a significant recurring revenue generator.

Other drivers include the promising Vietnam market and the Staffline recovery, which represents a S$21 million “hidden” cash reservoir that provides further upside as the UK labor market recovers.

Interest Rate Resilience

While no business is a fortress against macroeconomics, both Food Empire and HRnetGroup are significantly less sensitive to the “interest rate roller coaster” than typical Singaporean favourites like Banks and S-REITs.

Because they operate with massive cash piles with minimal (or zero) debt, they aren’t scrambling to refinance or watching their margins get eaten by interest expenses.

Instead, their growth is determined by strategy and execution. This makes them excellent diversifiers for a portfolio often too heavy on interest-rate-sensitive assets.

Having used up my current capital to top up my stakes in iFAST (AIY) and Parkway Life REIT (C2PU) last month, I will be holding my current positions in these two gems for now.

But they are definitely prime candidates for me to increase my stakes if opportunities arise.

Disclaimer

This content is for informational only. I am not a financial advisor, tax professional, or legal expert, and the information shared here does not constitute personalised financial advice, nor is it a solicitation to buy or sell any securities or financial instruments.

All opinions and commentary reflect my personal views and are based on general market commentary.

You are solely responsible for your own financial decisions. Investing involves risk, and any action you take based on the information provided on this blog or channel is strictly at your own risk.

Always conduct your own research and due diligence and consult with a qualified, licensed financial professional, tax professional, or legal advisor before making any investment or financial decision.