Three Shares To Fall In Love With

HeartIt’s Valentine’s Day. So here are my three shares that I think anyone could find it very easy to fall in love with.

Consider Keppel Corporation (SGX: BN4) and it is easy to see why anyone would fall in love with this company. Over the last two decades, shares in the industrial conglomerate have increased over six-fold on a dividend-adjusted basis. That equates to an annual total return of 9.7%. Shares in the Keppel are also some of the least volatile in the market thanks to its diverse interests that include Offshore & Marine, Infrastructure, Property, Telecoms and Energy. What’s more, the company has one of the highest Returns on Equity amongst the blue chips. At 18% it has delivered almost twice the returns compared to the 30 companies that make up the Straits Times Index (SGX: ^STI).

Dairy Farm (SGX: D01) is another company to swoon over. Since 1994, the supermarket has delivered a total return of 10.2% on an annual basis. Put another way, $10,000 invested 20 years’ ago in the owner of outlets that include Cold Storage, Giant and Guardian, would have turned into almost $70,000 today. Around 80% of the gains have come from an increase in the share price while the rest was generated from reinvested dividends. As a food retailer, Dairy Farm’s margins are not high. But what the company lacks in strong pricing power, it makes up for in efficiency. With an Asset Turnover of 2.6, Dairy Farm has generated $2.60 for every dollar of asset employed in the business.

It is sometimes said that still waters run deep. That is certainly true of United Overseas Bank (SGX: U11). Over the last two decades, shares in the bank have doubled from around $9.30 to about $20. A capital gain of roughly 4% a year is nothing to write home about. However, the total return, which includes reinvested dividends, is a considerably more impressive 8%. The total performance of UOB since 1994 highlights the importance of taking a long-term view to investing. It also underlines the importance of continually reinvesting the dividends that you receive. Or as Robert Browning once said: “Grow old with me. The best is yet to be.

Have a great Valentine’s Day!