As interest rates begin to ease, dividend-paying stocks are regaining appeal. In a declining rate environment, dividend yields increasingly outshine fixed-income alternatives, drawing income-seeking capital back into equities.

That said, not all dividend stocks stand to benefit equally.

In this article, we highlight five dividend stocks that are particularly well-positioned to outperform as interest rates move lower.

Why Falling Rates Are a Tailwind for Dividend Stocks

Lower interest rates provide an immediate boost to capital-intensive sectors such as REITs and utilities by reducing borrowing costs. Lower financing expenses translate directly into reduced debt-servicing costs, lifting net profits and strengthening cash flow generation.

More importantly, as yields on “risk-free” government bonds decline, stable dividend yields of 3% to 5% become increasingly attractive. This income rotation often drives valuation re-ratings, allowing investors to benefit not only from recurring dividend income but al

PropNex

PropNex stands to benefit disproportionately from a falling interest rate environment. Lower mortgage rates typically stimulate property transactions and support asset values, both of which are key drivers of PropNex’s business.

As the largest real estate agency in Singapore by agent count and market share, PropNex has delivered strong growth. Revenue expanded at a compound annual growth rate (CAGR) of 16.9%, rising from S$513.5 million in 2020 to S$1.04 billion for the last twelve months (LTM) ended 30 June 2025. Operating cash flow grew at a similar pace, increasing at an 11.1% CAGR to S$67 million over the same period.

Dividend growth has been equally impressive. The company’s full-year ordinary dividend rose from S$0.0175 in 2019 to S$0.0775 in 2024, representing a 343% increase. This trend continued in 2025, with PropNex declaring a record interim dividend of S$0.05 in August—more than double the interim payout a year earlier.

With no debt on its balance sheet and cash holdings of S$136.8 million as at 30 June 2025, PropNex is well-positioned to grow both cash flows and dividends as interest rates decline.

Centurion Corporation

Centurion Corporation owns and operates a portfolio of workers’ dormitories and student accommodation assets. Following the spin-off of its REIT, the group is transitioning toward a more asset-light business model, emphasising recurring management fees while continuing to pursue accretive acquisitions.

A lower interest rate environment is particularly beneficial for Centurion. Reduced debt-servicing costs enhance profitability, higher property valuations strengthen net asset value, and a lower cost of capital improves acquisition economics.

Since 2020, Centurion has grown annual revenue from S$133.2 million to S$358.7 million as of LTM ended 30 June 2025. Over the same period, operating cash flow increased from S$60.5 million to S$170.8 million.

With a low net gearing ratio of approximately 10%, Centurion is well positioned to refinance its S$713 million in total borrowings, providing a direct boost to earnings. The company has also delivered consistent dividend growth, increasing its annual dividend from S$0.01 in 2022 to S$0.04 in 2025.

UOB Kay Hian

UOB Kay Hian is a regional financial services group offering brokerage, corporate advisory, and fundraising services. Lower interest rates typically stimulate capital markets activity, as cheaper financing encourages both borrowing and investment—directly benefiting UOBKH’s core businesses.

With new SGX initiatives aimed at revitalising Singapore’s capital markets, UOBKH could see a meaningful uplift in activity levels.

Since 2020, revenue increased from S$536.6 million to S$654.9 million on an LTM basis. Net income grew more strongly, rising from S$159.4 million to S$209.5 million over the same period.

While the group’s dividend history has been somewhat volatile—FY2022 dividends declined by 32% year-on-year—the longer-term trend remains positive. The FY2024 dividend of S$0.119 per share marked a new all-time high, representing a 25% increase from the S$0.095 paid in FY2020.

The combination of lower interest rates and supportive capital market initiatives could position UOB Kay Hian for a strong 2026.

CapitaLand India Trust

CapitaLand India Trust (CLINT) owns a diversified portfolio of industrial assets in India and operates in a structurally higher interest rate environment compared to Singapore-listed REITs.

As at 31 October 2025, CLINT reported a gearing ratio of 40.9% and an average cost of borrowing of 5.8%, with 77.2% of its debt on fixed rates. As interest rates ease, the trust could refinance its borrowings at lower costs, improving distributable income and shareholder distributions.

Revenue grew at a CAGR of 9.7% from 2020 to S$291.1 million as of LTM. While net profit surged at a 27.6% CAGR to S$390.7 million, this was largely driven by one-off revaluation gains and tax reversals. Distributable income provides a clearer picture of underlying performance, growing at a steady 1.1% CAGR to approximately S$118 million for the LTM period, despite currency headwinds and elevated financing costs.

However, distributions have softened in recent years, with DPU declining from S$0.0883 in 2020 to S$0.0684 in 2024. Lower interest costs and gradual deleveraging could help CLINT stabilise and grow its DPU over time.

Sasseur REIT

Sasseur REIT focuses on outlet mall retail assets in China. As at 30 September 2025, the REIT maintained a low aggregate leverage ratio of 25.5% and a weighted average cost of debt of 4.6%.

A declining interest rate environment could lower financing costs, lift distributable income, and support asset valuations. While revenue has remained relatively flat since 2020—ranging between S$120 million and S$125 million due to RMB depreciation—net income improved from S$47 million in 2020 to S$63.2 million on an LTM basis.

DPU declined modestly from S$0.0654 per share in 2020 to S$0.06082 in 2024. However, with Chinese policymakers signalling stronger support for consumer spending in 2026 alongside lower interest rates, Sasseur REIT could see a meaningful recovery.

Let Lower Rates Work with Quality

While falling interest rates enhance the appeal of dividend stocks, the greatest beneficiaries are high-quality companies with strong cash flow generation and disciplined balance sheet management.

As rates decline, investors should focus on dividend coverage, cash flow resilience, debt maturity profiles, and sensitivity to interest rate movements.

Above all, dividend sustainability remains the most important factor in long-term income investing.