You stand in awe at its majestic structure. In front of you is a luxury hotel that looks like as though it has been carved from gold. As you make your way to the entrance, the porter at the door greets you with the sincerest smile you have ever seen. He then opens the glass door elegantly to let you enter. You immediately smell a whiff of fresh lemon, orange, and grapefruit, exploding with crisp greens. Classic Baroque music plays in the background. Hues of green, blue and purple decorate the hotel interior, making you feel at ease. You experience a near-Nirvana state….
As you make your way to the entrance, the porter at the door greets you with the sincerest smile you have ever seen. He then opens the glass door elegantly to let you enter.
You immediately smell a whiff of fresh lemon, orange, and grapefruit, exploding with crisp greens. Classic Baroque music plays in the background. Hues of green, blue and purple decorate the hotel interior, making you feel at ease.
You experience a near-Nirvana state.
Now, let’s delve into three hotel stocks listed in the Singapore that could, I hope, surpass all of the above experiences.
Mandarin Oriental International Limited (SGX: M04) is an international hotel investment and management group with deluxe and first class hotels, resorts and residences in sought-after destinations around the world. It now operates around 45 hotels representing 11,000 rooms in 28 countries. Mandarin Oriental is a part of Jardine Matheson Holdings Limited (SGX: J36).
In Singapore, the company operates Mandarin Oriental Singapore.
Mandarin Oriental has been a consistent dividend payer. In FY2012, it paid a total of 7 cents per share gross dividend. This translates to a yield of 4.2%. Its Price-to-Earnings is 23 and it is valued at 1.8 times book.
Overseas Union Enterprise Limited (SGX: LJ3) boasts brand-name hotels in its stable. These include Mandarin Orchard Singapore, Crowne Plaza Changi Airport Singapore and Marina Mandarin Singapore.
OUE has lodged a prospectus with the Monetary Authority of Singapore to spin off Mandarin Orchard Singapore and Mandarin Gallery into a Real Estate Investment Trust (REIT). It is planning to raise S$1.18 billion and each unit is expected to be price around S$0.90.
In 2012, OUE paid a dividend of 11 cents per share, which comprised 6 cents per share in gross dividend and 5 cents per share special dividend. It is yielding around 2%, which excludes the special dividends. It is valued at 29 times earnings and its Price-to-Book is 0.8.
Far East Orchard Limited (SGX: O10) is a member of Far East Organization, Singapore’s largest private property developer. Under the Hotels business arm, it owns hotels such as Oasia, Orchard Parade, Village Hotel Albert Court and Village Hotel Changi.
It is trading at 4.3 times historic earnings and a Price-to-Book of 0.7. Its dividend yield is at 2.8%.
There you have it. Three hotel stocks that could provide exposure to tourism growth in in both Singapore and in the countries the companies operate in.
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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 contributor Sudhan P doesn’t own shares in any companies mentioned.