3 “Boring” Singapore-Listed Companies That Could Be Potential Winners
- Original Post from The Motley Fool Sg

Investing legend Peter Lynch, is well-known for investing in dull, depressing or disagreeable businesses such as funeral home operators and waste management firms. Such companies do not provide excitement, and therefore, could be severely mispriced by the stock market.

In Singapore, there are a number of such “boring” companies that could be great investments. Let’s look at three of them.

Company #1

800 Super Holdings Limited (SGX: 5TG)is a provider of waste management, cleaning and conservancy, and horticultural services to the public and private sectors in Singapore. It is a licenced Public Waste Collector, appointed by Singapore’s National Environment Agency (NEA).

Recently, 800 Super’s share price got whacked after posting a disappointing set of financial results. For the fiscal year ended 30 June 2018, revenue fell 3.7% to S$151.1 million while net profit plunged 46.7% to S$9.1 million.

Following the earnings announcement in late August, 800 Super’s share price fell from S$1 to a low of S$0.60 in short order. Some investors might feel that the steep decline in the company’s share price was unwarranted. Future growth for the company could come from its sludge treatment facility at Tuas South, which is expected to be fully operational by December 2018. 800 Super’s new waste-to-energy plant started operations in February this year, and could generate new revenue streams and cost savings for the company once it ramps up fully.

At its share price of S$0.775 on Friday, 800 Super has a price-to-earnings (PE) ratio of 16 and a dividend yield of 1.3%.

Company #2

Advancer Global Ltd (SGX: 43Q) is a workforce solutions and services provider in Singapore. It has three business divisions: employment services; building management services; and security services.

For the six months ended 30 June 2018, Advancer Global’s revenue rose 2.7% to S$32.8 million, but its net profit fell by 29.6% to S$1.6 million. The security services division saw revenue growth largely because of higher service income from new security projects and aggregate service fees charged from on-going security projects. A fall in the number of foreign domestic workers placed out to Singapore households, and the termination of some cleaning service contracts provided some offset.

In its earnings release, Advancer Global described its growth prospects:

“[T]he Group is exploring to develop and expand its employment business in Japan, in view of its strategic alliance with Fullcast Holdings Co. Ltd., a listed company in Japan who through its subsidiaries provides a range of human resource services to companies in Japan. These plans (if crystallised), will create additional sources of earnings and growth for the Group in the long term.”

At Friday’s share price of S$0.23, Advancer Global has a PE ratio of 17 and a dividend yield of 2.6%.

Company #3

VICOM Limited (SGX: V01) provides technical testing and inspection services mainly in Singapore. It owns seven vehicle testing centres here and is a market leader with a 74.5% market share.For the second quarter ended 30 June 2018, VICOM’s top line rose 2.4% to S$24.7 million due to higher business volumes. Net profit tracked up as well, climbing 2.9% from S$6.1 million to S$6.2 million.

VICOM could see some headwinds in the sector it operates in though. In its 2018 second-quarter earnings update, it said:

“The recent fall in Certificate of Entitlement (COE) prices to their lowest levels in nearly a decade has resulted in the premature deregistration of cars with higher COEs before the 10-year mark. This is expected to affect the demand for the vehicle testing business. The non-vehicle testing business continues to face intense competition but is expected to remain stable.”

However, income investors might like VICOM as it provides a high dividend yield of around 6% at its current share price of S$6.08. Its market leadership position in Singapore’s vehicular testing industry should ensure it continues to be a cash cow.

$Advancer Global(43Q.SI) $800 Super(5TG.SI) $VICOM(V01.SI)

Read more

OCBC at 10.96. should i buy?


Reply to @chrisleong1 : WHY ASK .. YOU DUNNO WHAT UR DOING???

Recommended & Related Posts

This Cash Cow Has a REIT-Like Dividend Yield of 6%
- Original Post from The Motley Fool Sg

Singapore real estate investment trusts (REITs) have a distribution yield of between 4.8% and 11.4% as of yesterday’s close. Due to the relatively higher yield as compared to the stock market in general, REITs are popular among income investors.

There’s one company in Singapore’s stock market that has a dividend yield that is higher than 10 of the lowest-yielding REITs, with practically zero risk of going bust (since the company has no debt). The company I’m talking about is VICOM Limited (SGX: V01), a leading provider of technical testing and inspection services in Singapore.

At VICOM’s share price of S$6.08 yesterday, the company has a dividend yield of 5.98%, which is also way higher than the 3.5% yield offered by theSPDR STI ETF (SGX: ES3), an exchange-traded fund which tracks the fundamentals of theStraits Times Index (SGX: ^STI).

In this article, let’s find out more about VICOM’s dividends, such as its dividend history, dividend policy, and most importantly, the sustainability of the company’s dividend.

Dividend history

The following chart gives a snapshot of VICOM’s dividends from 2013 to 2017:

Source: VICOM Limited 2017 annual report

VICOM had increased its total dividend (including special dividends) from S$0.225 per share in 2013 to S$0.36 per share in 2017, giving an impressive annual growth rate of 12.5%.

Dividend policy

In the second quarter of 2017, VICOM’s dividend policy was revised to a payout ratio of 90% of net profit, up from a previous ratio of 50%. That’s why the company’s total dividend in 2017 spiked by 35.8% to S$0.36, as seen in the chart earlier.

Dividend sustainability

VICOM’s 2017 total dividend of S$0.36 per share gives a dividend payout ratio of 120%, considering VICOM’s earnings per share was S$0.299 for the year.

With a payout ratio of more than 100%, it shows that VICOM had paid out more in dividends than its earnings in 2017. This could mean that the company does not see a need to hold extra cash on its balance sheet. As of 31 December 2017, VICOM had S$107.5 million in cash and cash equivalents, and no debt. The company’s cash balance dipped to S$97.9 million, as of 30 June 2018, with the higher dividend payment for 2017.

In the 12 months ended 30 June 2018, VICOM had S$27.7 million in free cash flow while the total dividends paid was S$31.9 million. So, the company also paid a dividend that was more than its free cash flow.

Looking the actual payout ratios, VICOM’s dividend does not seem sustainable. However, if management’s intention is to return extra cash to shareholders by consistently increasing the company’s annual dividend (and slowly running down the cash on the balance sheet), income investors might do well owning this cash cow.


Read more
The Better Buy: VICOM Limited or SBS Transit Ltd?
- Original Post from The Motley Fool Sg

Both VICOM Limited (SGX: V01) and SBS Transit Ltd (SGX: S61) are substantially owned by one of the world’s largest land transport company, ComfortDelGro Corporation Ltd (SGX: C52). As of 5 March 2018, ComfortDelGro had a 67.1% stake in VICOM and a 74.6% stake in SBS Transit.

Even though both VICOM and SBS Transit are involved in different business, I decided to see which company might give investors a better bang for the buck since they are both linked to the same parent.

Introduction of the Two Firms

VICOM provides technical testing and inspection services mainly in Singapore, while SBS Transit provides bus and rail services solely in Singapore. Under SBS Transit’s rail services business, the company operates the North East Line, the Downtown Line, and the Sengkang and Punggol Light Rapid Transit.

The table below shows the market capitalisation and revenue for the two firms. Market capitalisation is as of the closing share prices on 4 October 2018.

Do note that all figures quoted in the tables that follow are for the full year ended 31 December 2017 (FY2017) for both companies, unless otherwise stated.Source: SGX StockFacts and company annual reports

Round 1: Profitability

In this first round, I will look at the profitability of the companies in terms of net profit margin andreturn on equity(ROE). The ROE figure reveals how efficient a company’s management is in turning every dollar of shareholders’ capital into net profit.Source: Company annual reports

For every dollar of revenue created by VICOM, around 27 cents were generated as earnings, but for SBS Transit, every dollar of revenue only gave four cents in profit. VICOM also has a higher ROE than SBS Transit.

Winner: VICOM.

Round 2: Growth

In this second round, I will compare the compounded annual growth rate (CAGR) of revenue, net profit and dividend of the two firms for the past five financial years. Companies that can grow their sales and profits steadily over time should also see their share price rise.Source: Company annual reports and author’s calculation

SBS Transit has trounced VICOM in all aspects. SBS Transit’s business has improved substantially after transiting to the Bus Contracting Model (BCM). To learn more about the BCM, you can check out the article written by my colleague, Chin Hui Leong, here.

Winner: SBS Transit.

Round 3: Valuation

As investors, it is essential to focus on the value of the business and not on the daily changes in the stock price.

We will now compare the price-to-earnings (PE) ratio, price-to-sales (PS) ratio and dividend yield of the two companies. The values below are as of the closing prices on 4 October 2018.Source: SGX StockFacts and author’s calculation

SBS Transit has a lower PE and PS ratio than VICOM. However, VICOM has a higher dividend yield than SBS Transit. Overall, though, SBS Transit triumphs over VICOM with its better valuation.

Winner: SBS Transit.

The Foolish Bottom Line

The final score is 2-1 to SBS Transit, as it has triumphed over VICOM in two out of the three rounds.

However, we have yet to look at other important aspects of SBS Transit, such as its balance sheet strength, ability to generate free cash flow, future growth prospects, and so on. Potential investors interested in SBS Transit should conduct more in-depth research before investing their money. This quick comparison serves as a useful starting point and helps take some heavy-lifting off an investor’s back.

$SBS Transit(S61.SI) $ComfortDelGro(C52.SI) $SBS Transit(S61.SI) $VICOM(V01.SI)

Read more
These 3 Companies Raised Their Dividends In The Last Quarter
- Original Post from The Motley Fool Sg

In a previous article here, we looked at three companies part of the Straits Times Index (SGX: ^STI) that have increased their dividends in the latest quarter. In this article, let’s look at three companies outside of the index which have rewarded shareholders with higher dividends.

Nordic Group Ltd (SGX: MR7)

Nordic is a supplier of services such as automation system integration solutions, vessel maintenance, repair and overhaul, and scaffolding and insulation, among others. The company mainly serves the marine, offshore oil and gas, petrochemical, pharmaceutical, infrastructure and public environment sectors.

For the second quarter ended 30 June 2018, Nordic saw its revenue rising 8% year-on-year to S$26.1 million with its net profit growing 17% to S$4.4 million. The top line growth was largely due to higher revenue from its Others segment from the sale of carbon allowances. The increase was offset by a fall in Project and Maintenance services revenues.

On a half-year basis, revenue increased by 11% to S$48.8 million while net profit climbed 19% to S$7.8 million.

Due to the higher profit for the first half of 2018, Nordic raised its interim dividend by 19% to 0.779 Singapore cent per share. A year ago, it paid out 0.653 cent. Nordic maintained its dividend payout ratio of 40% for both the dividend payments.

At Nordic’s share price of S$0.46 yesterday, it had a trailing price-to-earnings (PE) ratio of 11 and a trailing dividend yield of 3.6%.

SBS Transit Ltd (SGX: S61)

SBS Transit is a provider of bus and rail services in Singapore. Under the rail services business, the company operates the North East Line (NEL), the Downtown Line (DTL), and the Sengkang and Punggol Light Rapid Transit (SPLRT). As of 5 March 2018, ComfortDelGro Corporation Limited (SGX: C52), one of the largest land transport companies in the world, had a 74.6% stake in SBS Transit.

Revenue for SBS Transit’s 2018 second-quarter went north by 19.8% year-on-year to S$344.9 million. The growth was due to higher revenue from both its Public Transport Services segment and Other Commercial Services segment. Meanwhile, net profit surged 52.9% to S$19.4 million.

SBS Transit upped its interim dividend by around 60% to 5.80 Singapore cents per share. Last year, it dished out 3.65 cents.

SBS Transit shares ended Monday at S$2.60 apiece. The price translates to a trailing PE ratio of 13 and a trailing dividend yield of 3.8%.

VICOM Limited (SGX: V01)

VICOM provides technical testing and inspection services mainly in Singapore. It is also largely owned by ComfortDelGro. The land transport giant held 67.1% of VICOM, as of 5 March 2018.

Due to higher business volumes, VICOM’s top line for the second quarter inched up by 2.4% year-on-year to S$24.7 million. Net profit tracked up as well, growing 2.9% from S$6.1 million to S$6.2 million.

An interim dividend of 13.46 Singapore cents per share was declared, a 2.6% increase from 13.12 cents dished out last year.

At yesterday’s closing price of S$6.10, VICOM had a trailing PE ratio of 20 and a trailing dividend yield of 6.0%.

$Nordic(MR7.SI) $SBS Transit(S61.SI) $VICOM(V01.SI)

Read more
3 Things Investors Should Know About 800 Super Holdings Ltd’s FY2018 Earnings
- Original Post from The Motley Fool Sg

800 Super Holdings Ltd (SGX: 5TG) is a provider of waste management, cleaning and conservancy, and horticultural services to the public and private sectors in Singapore.

Yesterday afternoon, the company announced its financial results for the full year ended 30 June 2018 (FY2018). Let’s look at the highlights of the announcement here.

Show me the money

Revenue for FY2018 came in at S$151.1 million, down 3.7% year-on-year. The fall was largely due to the completion of term contracts and renewal of certain contracts at more competitive prices. Meanwhile, net profit tumbled 46.7% to S$9.1 million. Consequently, earnings per share fell from 9.58 Singapore cents to 5.12 Singapore cents.

Operating cash flow for the year plunged 48.3% to S$15.8 million. The company spent S$56.1 million in capital expenditure in FY2018, compared to S$24.6 million spent last year.

For the fourth quarter, revenue inched down by 1.8% year-on-year to S$37.9 million while the company reversed into a net loss of S$1.7 million. A year ago, it posted S$2.7 million in net profit.

800 Super’s balance sheet weakened for the year. As of 30 June 2018, it had S$5.6 million in cash and cash equivalents, and S$89.1 million in total borrowings. This gives a net debt position of S$83.5 million. In contrast, one year back, it had S$26.9 million in net debt.


The company has declared a final dividend of S$0.01 per share for the fourth quarter, down from S$0.03 per share declared last year. 800 Super did not pay any interim dividend for both the years.

What does the future hold?

The environmental services provider said that the industry that it is operating in is “highly competitive”. It competes with its peers based on the range and quality of services provided, timeliness of service delivery, and pricing.

Looking ahead, 800 Super commented that the development of the sludge treatment facility at Tuas South is now undergoing testing and commissioning. The facility has already started to treat sludge from water reclamation plants operated by the Public Utilities Board, and is expected to be fully operational by December this year.

Barring any unforeseen circumstances, the company expects to remain profitable in the next financial period.

The Foolish takeaway

800 Super had a weak FY2018 with lower revenue, net profit and cash flow. Its balance sheet is also more leveraged as compared to a year ago.

As a result of the poor showing, the company’s shares have taken a hit. The shares are currently changing hands at S$0.665 each, down 34% from Monday’s close of S$1 per share. The stock price translates to a price-to-earnings ratio of 13 and a dividend yield of 1.5%.

$800 Super(5TG.SI)

Read more
3 Companies That Have Performed Well in the Latest Quarter
- Original Post from The Motley Fool Sg

As investors, quarterly earnings updates are the best way to gauge if a company is falling short or meeting investor expectations. Over the last few weeks, I have been keeping a close watch as numerous companies released their earnings update for the first half of 2018.
Here are three companies that have performed well in the most recent quarter.
Oversea-Chinese Banking Corp Limited (SGX: O39)
Like the other two major banks in Singapore, OCBC had a great first half of 2018.
OCBC’s net interest margin rose 2 basis points year-on-year. Together with larger loan volume, net interest income increased 8%. Non-interest income also increased by 2% year-on-year and 12% quarter-on-quarter. Its wealth management segment, a low-capital, high return business continues to do well, rising 3% year-on-year. This segment has compounded at an annual rate of 23% between December 2014 and December 2017.
Overall, net profit rose 16% year-on-year for the quarter. For the first half of 2018, the group’s net profit was 22% higher than a year ago.
With interest rates continuing to rise, we can expect higher net interest margins in the future. The company also declared an interim dividend of 20 Singapore cents, 11.1% higher than previous year but still at a comfortable payout ratio of 36%. OCBC’s shares currently trade at S$11.94 apiece, giving an annualised dividend yield of 3.3%, a price-to-earnings ratio of 10.9 and price-to-book of 1.2.
Mindchamps Preschool Ltd (SGX: CNE)
Listed late last year, Mindchamps Preschool Ltd operates one of Singapore’s most well-known preschool franchises. Its classes revolve around neuroscientist Professor Emeritus Allan Snyder’s research on the three minds model of education: the champion mind, the creative mind, and the learning mind.
The company had perhaps its best quarter since its listing with revenue spiking 60% to S$7.6 million from S$4.8 million in the corresponding period last year. Operating profit outpaced revenue growth, increasing 92% year-on-year. Net profit was 65% higher at S$1.24 million.
Mindchamps has been actively pursuing inorganic growth through its greater financial muscle since its listing. During the quarter, the number of company owned and operated preschools increased to 13 from six, while the number of franchisee owned and operated centres increased to 51 from 40.
In addition, it has recently acquired four preschools in Australia and opened its first school in Vietnam, expanding its global footprint. The company has also tied up with Keppel Capital Ventures Pte Ltd to establish a new private fund to acquire education real estate.
Mindchamps shares are currently going at S$0.695 per piece, translating to a price-to-book ratio of 2.92 and an annualised price-to-earnings of 52.6.
VICOM Limited (SGX:V01)
VICOM operates seven vehicle inspection centres in Singapore and has inspected more than 10 million vehicles since it began business.
The company has faced challenges in recent years with limited growth in car numbers, and its non-vehicular inspection and testing services facing headwinds. But in the second quarter of 2018, VICOM returned to growth with revenue growing 2.4% to S$24.7 million as business volume increased during the quarter.
Profit margin also improved, probably due to price hikes that the company has imposed on vehicle testing. Consequently, operating profit rose 5.1% to S$7.4 million. Earnings per share for the quarter was 7.05 cents.Management declared an interim dividend of 13.46 cents per share, a 2.6% increase from last year.
At the time of writing, shares of VICOM traded at S$6.32 per piece. This gives an annualised price-to-earnings of 21.1 and a trailing dividend yield of 5.7%.
$MindChamps(CNE.SI) $OCBC Bank(O39.SI) $VICOM(V01.SI)

Read more

There are more for you ...

View more and participate in our discussion now. It's FREE.

Creating an account means you’re okay with InvestingNote's Terms and Conditions