MENU

Three Things To Like About Thai Beverage

Ser Jing - Thai Beverage First Quarter Results, Weighed Down by Acquisitions (pic)If you are a defensive investor, then Thai Beverage (SGX: Y92) is likely to figure highly on your watch list.

That is the first thing to like about Thai Beverage. Defensive shares, it should be said, are not the most exciting of businesses. However, their product and services tend to be stable in both good times and bad, which can confer a degree of stability. Some investors might find that attractive, while others may balk at the attribute.

In the main, defensive shares tend to pay out a large proportion of their earnings to investors as dividends. And Thai Beverage is no exception. It distributes around 70% of its earnings to investors. Over the last five years, dividends have a grown around 7% a year.

The second thing to like about Thai Beverage is its attractive Return on Equity (RoE). The company’s RoE is one of the highest on the Singapore market. While investors can expect a return of about 9% from the 30 companies that make up the Straits Times Index (SGX: ^STI), Thai Beverage’s RoE is, by comparison, a mouth-watering 45%.

Thai Beverage also provides investors with an easy way to get exposure to the Thai economy – the company generates over 90% of its revenues from Thailand. Its flagship brand, Chang, together with its other bubby amber nectar, is reckoned to command around half of the Thai beer marker. Apart from beer, the company also distils rum, whiskey, vodka and gin.

The Motley Fool's purpose is to help the world invest, better. Click here now for your FREE subscription to Take Stock -- Singapore, The Motley Fool's free investing newsletter. Written by David Kuo, Take Stock -- Singapore tells you exactly what's happening in today's markets, and shows how you can GROW your wealth in the years ahead.

Like us on Facebook to keep up-to-date with our latest news and articles. The Motley Fool's purpose is to help the world invest, better. 

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.