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Three Things To Like About Jardine Cycle & Carriage

Jardine_Cycle_&_Carriage_LogoMany investors will think of Jardine Cycle & Carriage (SGX: C07) as a distributor of luxury cars in Singapore. But the company does more than sell Mercedes-Benz, Toyota, Honda and Kia cars in Singapore. It does a lot more, which is the first thing to like about the company.

Through its investment in Indonesian conglomerate Astra International, the company provides investors with a conduit into one of Southeast Asia’s fastest growing economies. In fact, over 90% of Jardine Cycle & Carriage’s revenues are generated from Indonesia. Consequently, investors who are looking for a way to achieve geographic diversification might want to investigate Jardine C&C more closely.

Jardine C&C also makes good use of its assets, which is another likeable attribute. Its Asset Turnover of 1.1 is one of the highest amongst Singapore’s blue chips. This implies that the company has generated $1.10 of revenue for every $1 of asset employed. By comparison, the average for the 30 companies that make up the Straits Times Index (SGX: ^STI) is 0.5. So, Jardine C&C is more than twice as efficient at using its assets to generate sales.

The third likeable quality of Jardine C&C is its consistent dividend payouts. Since 2007, the company has increased its distribution to shareholders almost three-fold. This equates to a compound annual increase of around 22%. Currently, the historic divided yield is 4.4%, which is above the market average.

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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.