If you are feeling the pinch, you’re not imagining it. 

Last December marked the fourth successive year of public transport fare increases hitting Singapore commuters. 

In all likelihood, you won’t see the last of these hikes, as fares are reviewed annually based on a formula that accounts for wages, energy costs and the general operating costs of public transport.

Some of you might lament about the increase, while others may just accept it. 

But what if I told you there’s a third option? 

You can invest in these land transport companies, which have historically paid out decent dividends. 

This move will not only mitigate the increase but also might help you recoup part of your transport expenses.

SBS Transit (SGX: S58)

SBS Transit is the largest bus operator in Singapore with about 200 bus services. It also operates rail services for the North East Line, Downtown Line, and Sengkang and Punggol LRT systems.

Revenue and net profit for the past three fiscal years (FY) have stayed relatively stable at around S$1.5 billion and S$70 million respectively.

However, its revenue might decrease this year, due to the expiry of the Jurong West bus package last August. 

The numbers from its 1Q 2025 business update partly reflect that. 

The quarter’s revenue declined by 4.7% year-on-year (YOY) to S$374 million and profit after tax dropped by 6.1% YOY to below S$16 million.

Despite this decrease, it will still be a solid set of results if the company can sustain this performance for the remaining year.

But what about investors? 

Can SBS Transit maintain last year’s generous ordinary dividends of S$0.2027?

It might, but it’s important to note that even excluding the one-off special dividend (derived from the sale of the Soon Lee bus depot), last year’s payout ratio for the ordinary dividends was unusually high at 90%.

In layman’s terms, SBS Transit paid out 90% of its profits.  

Hence, it’s more prudent to project using the minimum of the company’s stated dividend policy of paying out at least 50% of profit attributable to shareholders.

Annualising its 1Q 2025 results, SBS Transit estimated earnings per share for the year will be around S$0.20, resulting in at least S$0.10 in dividends per share.

At the current trading price of S$2.95, this provides a decent yield of close to 3.5%.

Vicom Limited (SGX: WJP)

What if you drive more often than take public transport?

Then, Vicom is likely a familiar name.

Being a duopoly in the vehicle inspection sector, and commanding over 70% market share, Vicom’s position provides it with reliable revenue.

Additionally, it has a non-vehicle testing segment which also contributes positively to the company’s profitability.

This resilience is evident from the strong set of numbers it achieved for the past five years. 

While the growth in its revenue and earnings are not spectacular, compounding annually at a rate of about 8.4% and 4.6% respectively over the five years is respectable. 

Furthermore, the business has a return of equity of around 20%, a ratio that is nothing to scoff at, especially when it doesn’t carry any debt on its books.

The momentum continued into 1Q 2025, where its top and bottom lines grew by an impressive 18.9% and 7.5% respectively, partly driven by the ongoing ERP 2.0 On-Board Unit (OBU) project.

Additionally, it generated almost S$11 million of cash from its operating activities, resulting in an increase of its cash and equivalents to S$65 million.

Consequently, Vicom is likely able to sustain its trailing dividend of S$0.058 per share, which translates to a decent yield of almost 4% at the current trading price of around S$1.52.

This yield could be sustained despite the upcoming capital expenditure (capex) of S$50 million this year. 

The capex is primarily for the development of the new Jalan Papan integrated testing centre, which is expected to be operational in 1H 2026.

Not only does the new site replace the Pioneer vehicle inspection centre, it will also provide its non-vehicle testing business with new testing capabilities.

Upon the completion of the construction and development of Jalan Papan site, capex should normalise from FY 2026. 

In turn, Vicom should then see an increase in net cash flow in subsequent years with the potential for higher dividends from FY 2026 onwards.

ComfortDelGro Corporation (SGX: C52)

So far, you have heard about SBS Transit and Vicom.

But there’s another compelling option to consider: ComfortDelGro, or CDG.

This land transport giant serves as the parent company to both, owning approximately 74% and 67% of SBS Transit and Vicom respectively.

For investors, this high ownership means a large portion of the profits generated by SBS Transit and Vicom directly contribute to CDG’s overall profitability and bolsters its financial strength on the balance sheet.

Beyond its public transport and inspection pillars, CDG also commands the largest fleet of taxis in Singapore. 

Together with its private hire fleet, this segment has seen a notable improvement in its profit margin in recent years.

However, the most exciting development for CDG is its significant international expansion over the past year. 

Besides winning bus and rail tenders, CDG also strategically acquired the CMAC Group and Addison Lee Group in the UK, along with A2B Australia Limited.

This aggressive expansion has been accretive to the Group’s overall results. 

The impact of this global strategy became evident in 1Q 2025. 

For the first time in the group’s history, its overseas segment contributed more than 50% to the total group revenue, surpassing the Singapore segment.

This diversified base, new contracts, and acquisitions propelled CDG’s 1Q 2025 revenue and profit up by approximately 16% and 19% respectively.

If CDG can sustain this robust performance for the remainder of the year, it’s highly probable that the company can at least maintain its trailing dividend of S$0.0777 per share. 

This translates to an attractive yield of approximately 5.4% based on the current trading price of around S$1.43.

So what’s the catch, you may ask? 

Indeed, these substantial acquisitions have tipped CDG’s balance sheet from a net cash position to a net debt position of about S$390 million.

However, this debt level, resulting in a net gearing of just 11.2%, is considered highly manageable given the group’s strong and consistent operating cash flow.

This strategic leveraging is a calculated move to fund future growth, positioning CDG for continued strong performance.

Get Smart: Beyond the land transport companies

While SBS Transit, Vicom, and ComfortDelGro offer unique exposures to Singapore’s transport sector, the investing principle is rooted in fundamentals. 

The key is to seek out quality companies that demonstrate consistent profitability and a commitment to sustainable dividends. 

Such investments can indeed help to mitigate rising living costs, including your transport expenses, by providing a steady stream of income. 

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Disclosure: Chan Kin Chuah owns shares of ComfortDelgro and Vicom.