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Hey there fellow dividend investors! Welcome back to the channel.

This year has so far been a great year for some of our heavyweight dividend names here, and they have surged to levels we haven’t seen in years — in some cases, record highs. Naturally, that raises the question: do they have more room to run, or is this where the music slows down?

In today’s post, I want to go beyond the headlines. So I’ll break down three big cap dividend stocks that have done very well, with three very different engines of return. I’ll be discussing what’s really driving these price surges, and how sustainable those drivers are. And most importantly, stay till the end where I share what I’d do right now for my personal portfolio in ‘The Dividend Uncle’s Take’ section. 

But before we dive in, let me remind you that this post is for informational purposes only and not financial advice. Always do your own research and consult a licensed financial adviser before making any investment decisions. I own some of the shares discussed, but what works for me might not work for you.

Alright, let’s get started.

Hongkong Land: Unlocking N.A.V.

The first big cap outperformer is Hongkong Land. It is a Jardines-backed property developer and operator. Its bread and butter is ultra-prime mixed-use assets — combining office and luxury retail — anchored by its Hong Kong Central portfolio, with important stakes in Singapore’s Marina Bay Financial Centre and One Raffles Quay. In recent years, the group has been pivoting away from build-to-sell housing toward recurring commercial ecosystems.

So what’s behind the surge? For years, investors complained about “all talk but no action” on promises of unlocking value. That has definitely changed! 

In April, HongKong Land sold nine floors at One Exchange Square to the Hong Kong Stock Exchange for about US$810 million, and immediately used part of the proceeds for a US$200 million buyback. 

Then in September, it doubled down: selling its entire M.C.L. Land unit to Sunway for around S$739 million, announcing another US$150 million in buybacks, and committing to de-gearing.

Investors who have been around for a while, like this Uncle here, will recall how M.C.L. Land was a prominent property developer listed on the SGX many years back, before being shrewdly taken private by HongKong Land.

But the logic for HongKong Land’s strategy this year is clear: sell assets at close to book value, then use those proceeds to buy back its own shares, which are trading at nearly a 50% discount to N.A.V.. It’s a direct attempt to address the valuation gap of its share price. 

Investors have definitely noticed. The share price has surged more than 40% year to date, making it one of the STI’s best performers.

Another significant development is that the valuation of Hong Kong properties has also stopped sliding. After years of N.A.V. erosion, 1H 2025 showed underlying profit back in the black, Central office valuations stabilising, and N.A.V. per share ticking up to about US$13.6. With cash proceeds reducing gearing, more buybacks on the way, and lower interest rates easing cap rate pressure, sentiment has turned decisively.

But near-term headwinds remain: renovations at its property, Landmark, are costly, and Hong Kong office rents are merely stabilising, not recovering strongly. 

In my view, the rerating so far is justified — but this is still primarily a NAV-unlock story. If management keeps delivering on asset sales and buybacks, the discount could narrow more, even without a major rental rebound. Still, expect volatility around quarterly leasing data and China sentiment.

My personal take on this? I think the upturn is deserved — it’s backed by hard actions, not hype. But for the rally to extend, Hongkong Land must continue with its strategy, and execution is key. The risk overhang is the performance of the overall Hong Kong property market, which in turn would be dependent on the economic growth of the city.

Singtel: Riding the Digital Bandwagon 

Singtel is Singapore’s flagship telco, with two main engines. The first is its core business: mobile and broadband in Singapore and Australia (through Optus), plus enterprise tech services through its unit NCS, which helps companies with IT solutions and digital transformation. 

The second is its regional associate stakes — big names like Airtel in India, AIS in Thailand, Telkomsel in Indonesia, and Globe in the Philippines. On top of that, a newer growth wedge is Nxera, its AI-ready regional data-centre platform.

So why is the stock finally awaken after almost 10 years of doing nothing? 

First, core earnings momentum. In 1Q FY26, underlying profit rose about 14% year-on-year to S$686 million, thanks to stronger profits from Optus and NCS, and higher contributions from its overseas associates. Statutory profit spiked on one-offs, but the key story is that Singtel is getting better returns on the money it invests — that’s what analysts mean when they say improving “ROIC” all over their reports. 

Second, the data-centre flywheel. The new Nxera Tuas facility, set for early 2026, is designed for the AI era, with liquid-cooling systems that can handle high-performance computing. It’s also energy efficient, targeting a P.U.E. — or Power Usage Effectiveness — of under 1.25, meaning very little wasted energy compared to traditional data centres. Nxera is actively hiring more than 500 staff, which shows confidence in demand.

Third, capital management. Singtel has been selling down stakes like Airtel shares to raise cash, while also committing to a multi-year buyback programme. That’s supportive for shareholders because it reduces share count and helps earnings per share grow.

But what’s the cloud hanging over SingTel? One word – Optus. In mid-September, a major outage prevented emergency calls, tragically linked to four deaths. That incident is already under independent review, with possible penalties ahead. And this just in, as I was completing my post: another outage hit — affecting around 4,500 customers in Dapto, New South Wales, disrupting some emergency calls again. Optus confirmed all callers were ultimately safe, but the reputational damage adds to the crisis. But this incident alone caused SingTel’s share price which dropped almost 4% over just a few days.

The timing couldn’t be worse: Singtel Group CEO, Optus CEO, and Chairman are meeting Communications Minister Anika Wells in Sydney this week to address the fallout. With half of Singtel’s revenue coming from Optus, sentiment in Australia can weigh heavily on the parent’s share price.

Valuation is another factor. After a 40% year-to-date run, the stock is trading more expensively than usual. To climb further, investors will want to see Nxera milestones — like pre-sold capacity and new contracts — and continued earnings growth from Optus and NCS.

My personal take? The long-term story is intact — enterprise digital growth, AI-ready data centres, and capital returns are solid drivers. But Optus headline risk has become a constant feature, not a one-off. This reflects the operational risks for a Telco. 

For Singtel to keep going higher, execution at Nxera and steady earnings growth need to come through, even as Optus continues to fix its reputation.

Before moving on to the last big cap stock, if you find this kind of “what’s driving the rally and what to do now” analysis useful, do help this Uncle out by giving the post a thumbs up! And if you’d like deeper notes and early watch alerts when my personal investment thesis shifts, consider joining as a YouTube channel member, just like what my latest member, Ian Wong, did. 

ST Engineering: Defence + Aerospace Muscle

ST Engineering is a diversified engineering giant, spanning Defence & Public Security, Urban Solutions & Satcom, and Commercial Aerospace. Its dividends are supported by long-cycle defence programmes and a record order book.

What’s behind the highs? Visibility and delivery. The order book is at a record S$31.2 billion as of June, with S$5 billion slated for delivery in the rest of 2025. That’s unusual visibility for a Singapore industrial, and investors love visibility.

Commercial aerospace is another key driver. In September, ST Engineering opened a new engine MRO facility at Paya Lebar, doubling its production capacity to 300+ engines a year by 2027. Combined with Xiamen, total capacity will exceed 400 shop visits annually. This positions ST Engineering squarely in the middle of the global LEAP engine maintenance cycle — a growth engine that will spin for years.

Urban solutions are also contributing. ST Engineering recently secured contracts from the LTA for the Thomson-East Coast Line Extension, covering communications systems, data systems, and platform screen doors. These add to its smart mobility backlog. 

Financially, the group is delivering: in 1H 2025, revenue rose ~7% YoY, PATMI jumped ~20%, and interim dividends remained steady.

What’s next? Defence demand is structurally strong, aerospace is in an upcycle, and capital recycling could help deleverage and cut interest costs. But valuation is now rich compared to its history. In this stage where investor expectations are high, any slip — supply chain hiccups, project delays, or a softer aerospace cycle — could trigger a loss of confidence. To keep momentum, ST Engineering needs to keep beating and raising, while showing it can fund growth without creeping leverage. 

My quick take on this is that the upside story is durable, but as the stock is no longer cheap, the risk of underperforming investors’ expectations is higher.

The Dividend Uncle’s Take — What I’d Do Now

When stocks hit record highs, the temptation is to chase them higher. But for me, the real question isn’t “how high can they go?” — it’s “what must stay true for these moves to last?”

For Hongkong Land, the surge has been fueled by real actions — asset sales, buybacks, and debt reduction. That shows management is serious about narrowing the steep discount to NAV. But longer-term, much still hinges on Hong Kong’s property market and broader macro recovery. 

I don’t own Hongkong Land today. While I see potential for further re-rating, I’d prefer clearer signs of leasing and rental stability before starting a position. Tactically, if I wanted to play a China or Hong Kong recovery now, I’d look at tech rather than property.

For Singtel, the structural growth story remains appealing — Nxera’s data centres are real catalysts — but Optus is a constant reputational drag. I’m holding, because I see these incidents as near-term noise rather than long-term damage. If headlines trigger a sharp dip without changing fundamentals, that’s when I’d consider adding.

For ST Engineering, the visibility from its order book and aerospace expansion is rare and valuable, and global defence rerating trends remain a tailwind. But valuations are already stretched. 

I own ST Engineering, and after such a strong run-up, I’d take the chance to realise some profits. At the same time, I’m happy to hold my core stake, enjoy the dividends, and watch for new catalysts.

In short: I’m not chasing at these highs. I’m holding where the long-term stories are intact, taking profits selectively, and waiting for better entry points. In markets like these, patience often pays more than excitement.

That’s my take — now I’d love to hear yours. Which of these names do you own, and what’s your plan at current levels? Share your views in the comments. And if you found this helpful, don’t forget to like and subscribe.

Until next time, happy investing!