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Three Things To Like About Genting Singapore

To say that Genting Singapore (SGX: G13) is a casino operator would be doing the company a great disservice. It is an integrated resort operator, which means that it has its finger in many pies, of which providing games of chance is just one.

That is the first thing to like about Genting Singapore – its diversified business model. Apart from being a casino operator, it also owns a convention centre, museum, spa, lots of restaurants and hotels, the world’s largest oceanarium, and it even has time to run a theme park. Not just any old theme park but Universal Studios.

Genting Singapore’s unique selling proposition is the second thing to like about the company. It is a go-to destination for many overseas visitors to our Garden City. As a destination of choice, it has that special quality that many investors look for in a company – pricing power. That is exemplified by its above-average Net Income Margin.

While the average margin for the 30 Singapore blue chips that comprise the Straits Times Index (SGX: ^STI) is 18%, Genting Singapore’s margin is around 23%.

Genting Singapore is also a growth company in its early stages of expansion. That is the third thing to like about the company. Lest we forget, the company only won the bid to develop one of two integrated resorts with casinos in Singapore in 2006. What’s more it only opened its doors to Resort World Sentosa four years ago. Over those seven years, revenue has jumped from S$290m to $2,940m – a ten-fold increase.

Growth investing can be more risky than other types of stock market investing strategies. But it can also be more rewarding. In the case of Genting Singapore, it has rewarded early investors with an annual total return of around 18% since 2006. Most of that has come from capital gains. So don’t expect the company to dish out much in the way of dividends. It can’t because it is still growing.

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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.