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Singapore’s Steadiest Transport Company

ComfortSingaporeThe ability to get from A to B as quickly and as cheaply as possible is the dream of most travellers. However, what may be good for the traveller may not be that good for investors.

So somehow, transport companies have to weigh up the needs of its customers with the demands of its investors. This can be quite a challenging balancing act to perform.

Consider Singapore’s, quoted trains, planes and automobile sector. We’ve included some boats to make the journey a bit more interesting. The sector is dominated by ComfortDelGro (SGX: C52), which is worth an estimated S$4b. The company runs the omnipresent blue Comfort and yellow CityCab taxis in Singapore. It also owns a hefty chunk of SBS Transit, which has interests in not only buses but trains too.

As an investment, ComfortDelGro dos not appear to be built for speed. But what it seems to lack in pace it makes up for in comfort. Earnings have grown at a pedestrian rate of about 2% annually over the last five years but its dividend yield of 3% is better than the market average.

Profit growth over the last half decade at rival SMRT (SGX: S53) has been relatively flat too. In 2007, earnings per share were nine cents and last year they were eight. Nevertheless, the flat earnings at SMRT compares well with Singapore Airlines (SGX: C6L) that has seen its profits descend at a rate of 30% annually since 2007. They are down from $1.72 per share in 2007 to 28 cents per share last year.

That said, airlines are typical cyclical businesses. So, in an economic downturn you would expect most plane operators such as Singapore Airline to find the going tough. Likewise, Tiger Airways (SGX: J7X) has found the going tough too, since its flotation in 2010. Last year it slumped to a loss of S$104m on sales of S$618m.

Neptune Orient Lines (SGX: N03) has been loss-making in three out of the last four years. The company, which is Southeast Asia’s biggest container-shipping company, has been hit by a combination of low demand and high fuel costs. NOL should recover, but it will need economic conditions in the West to improve first.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.