The Christmas season has arrived.

This period of heightened spending, from corporate catering trays to high-end timepieces adorned with festive ribbons, offers a chance to evaluate companies positioned to capitalize on the seasonal upswing.

Here are three small-capitalization stocks tapping into Singapore's holiday shopping frenzy, each representing a distinct segment of the celebratory market.

Delfi Ltd (SGX: P34)

Chocolate continues to be a quintessential treat for affordable luxury during the holidays.

Delfi is engaged in the production and distribution of chocolate confectionery across 17 nations, such as Singapore, Malaysia, and the Philippines.

The company's leading brands, including SilverQueen, Ceres, and Delfi, hold formidable market shares in Indonesia.

For the initial nine months of 2025, net sales increased by 1.6% compared to the previous year, reaching US$384.4 million.

Although sales in Indonesia declined by 1.7% year-on-year to US$236.2 million, the Regional Markets segment, which encompasses Singapore, experienced a 7.2% year-on-year growth.

The standout performance, however, was in cash generation.

Free cash flow skyrocketed to US$48.9 million for the first three quarters of 2025, a significant rise from US$18.9 million in the same period last year.

This enhancement was fueled by stringent working capital management, with reductions in inventory and receivables leading to a US$15.8 million decrease in working capital.

As of September 30, 2025, the group held cash reserves of US$70.1 million, substantially outweighing its modest borrowings of US$19.3 million.

Trading at S$0.80, shares of Delfi offer a dividend yield of 3.6%.

Old Chang Kee Ltd (SGX: 5ML)

A social gathering in Singapore is hardly complete without a serving of curry puffs.

Old Chang Kee runs a network of retail stores specializing in quick-service food items.

The group is renowned for its signature Curry'O, featuring a spiced potato and chicken filling enveloped in a deep-fried pastry shell.

Its product range also includes spring rolls, chicken wings, noodle dishes, and drinks, with operations centered in Singapore and a minor footprint in Malaysia.

For the first half of its fiscal year 2026, ending September 30, 2025, Old Chang Kee posted revenue of S$51.9 million, a slight 0.2% increase year-on-year.

This growth was propelled by additional sales from new and established outlets, coupled with increased delivery and catering orders—an encouraging indicator as the party season approaches.

However, net profit fell by 19.3% year-on-year to S$5.0 million, as profitability was squeezed by escalating costs.

Gross profit margins contracted by 0.2 percentage points to 69.3%, attributed to higher ingredient costs and increased wages for production staff.

Despite this pressure on margins, free cash flow remained healthy at S$8.8 million.

Critically, the company maintains a sturdy balance sheet.

As of September 30, 2025, the group possessed total cash of S$57.3 million against a mere S$1 million in debt, resulting in a substantial net cash position of S$56.3 million.

The board announced an interim dividend of S$0.01 per share, scheduled for payment in December, conveniently timed for holiday expenditures.

At a share price of S$1.12, Old Chang Kee offers a dividend yield of 1.8%.

The Hour Glass (SGX: AGS)

Occupying the premium end of the gifting spectrum is The Hour Glass.

This specialty retailer of luxury watches manages a portfolio of over 70 boutiques in 15 cities throughout the Asia-Pacific region.

It is an authorized dealer for eminent Swiss watchmakers like Rolex, Patek Philippe, Audemars Piguet, Cartier, Hublot, and Chopard.

For individuals seeking significant milestone gifts this Christmas, the company's financial results indicate sustained strong demand for luxury watches.

For the first half of fiscal 2026, ended September 30, 2025, revenue grew 14% year-on-year to S$615.4 million.

Profit attributable to owners jumped 23% year-on-year to S$75.7 million.

This robust performance was supported by strong sales across the company's boutique network, while gross margins held steady at 30.8%.

Free cash flow leaped to S$95.3 million, a sharp increase from S$39.4 million a year earlier, driven by more efficient working capital management.

As of September 30, 2025, the group had cash and bank balances of S$196.1 million, compared to borrowings of S$86.5 million.

An interim dividend of S$0.02 per share was declared, payable on December 8, 2025.

With shares trading at S$2.28, the dividend yield stands at 2.6%.

Key Takeaway: Festive Financial Strength

From confectionery and snacks to haute horology, these three small-cap stocks provide varied avenues to gain exposure to Singapore's holiday expenditure.

Their common denominator is solid financial health.

Delfi holds US$70.1 million in cash, with free cash flow more than doubling year-on-year.

Old Chang Kee maintains a net cash position of S$56.3 million, a considerable amount for a firm of its scale.

The Hour Glass possesses S$196.1 million in cash, alongside free cash flow that surged to S$95.3 million.

For investors seeking income, these strong cash positions underpin the sustainability of dividend payments.

Two of the three companies are distributing dividends in December, offering a minor seasonal bonus for their shareholders.

As with any investment, aligning choices with personal financial objectives and risk tolerance is paramount.

However, for those considering small-cap investments that combine dividend income with financial robustness, these three holiday-themed contenders warrant further examination.