Industrials | Neutral
Broker: OCBC Investment Research, Sept 13
Among the local conglomerates in our yard space, all stocks (Keppel Corp, Sembcorp Industries, Sembcorp Marine, Yangzijiang Shipbuilding (YZJ) are down year to date, with more volatility seen for YZJ and Sembcorp Marine.
YZJ is down 22 per cent year to date, but if we look at the stock’s performance since mid-July (close to trough for the market and prior to most companies’ third-quarter results release), it has appreciated by 34 per cent, outperforming most local stocks by a wide margin.
Another outperformer since mid-July is Sembcorp Industries, which is up 14 per cent, aided by a turnaround in India operations amid a tightening power market.
Among transport-related names (ComfortDelGro, Singapore Airlines (SIA), Sats, SIA Engineering), all are down year to date except for ComfortDelgro, which is up 14 per cent, aided by a rally in April-May.
Investors looking for good dividend yields and some growth prospects over the long term could consider ComfortDelGro, which offers a 4.6 per cent yield at current levels, and Sats, which has been increasing its dividends by one cent per year since FY13. Based on last year’s 18 cents per share, there is a 3.6 per cent yield at current levels.
SIA and SIA Engineering also offer dividend yields of 4.2 per cent and 4.4 per cent based on last year’s dividend figures, but we note that there is relatively less consistency compared with ComfortDelgro and Sats, which have been increasing their dividends over the years.