The Best Jardine Company To Buy

200px-Jardine_Matheson_Holdings_logo.svgPicking your way through the Jardine Group is a bit like picking through a box of luxury chocolates. You know the contents are good but no one ever wants to be stuck with the chocolate-coated caramel.

The Jardine Group is a sprawling organisation that spans property, hotels, supermarkets, farming, insurance and even car showrooms. To say that it has its finger in many pies would be a gross understatement. It owns the pie.

Through Dairy Farm (SGX: D01) it runs 5,600 retail outlets across Asia. Through Mandarin Oriental it operates 45 deluxe hotels around the word. Through Hongkong Land (SGX: H78) it owns 450,000 square feet of prime property in central Hong Kong.

The two key companies within the Jardine Group are Jardine Matheson (SGX: J36) and Jardine Strategic (SGX: J37), which effectively control the other baby-Jardines and also each other.

Over the last decade, the various parts of Jardine have delivered different returns. That is only to be expected since they are involved in vastly different businesses. No one would expect the returns from Jardine Cycle & Carriage, which is involved in automobiles, farming and mining, to be comparable to that of Jardine Lloyd Thompson, which is involved in insurance and reinsurance.

Since 2004, Jardine Strategic, Jardine Matheson, Jardine Cycle & Carriage and Dairy Farm have delivered quite similar returns. The annual total returns are in the mid-twenty percent range. Meanwhile, Hongkong Land and Mandarin Oriental have delivered annual returns in the mid-teens. Jardine Lloyd Thompson’s annual return has been 11%.

That said, JLT is the least volatile. Its share-price volatility is not too dissimilar to the market average. Likewise with Mandarin Oriental, Hongkong Land and Dairy Farm – their share-price movements are unlikely to give you too many sleepless nights.

The same cannot be said of Jardine Cycle & Carriage, which is nearly twice as volatile as the market.

If volatility is seen as a proxy for risk, then Jardine Cycle & Carriage could be viewed as the riskiest company within the group. Consequently, its return relative to risk is one of the lowest. Jardine Strategic and Jardine Matheson, through their wide diversification, fare best on that score.

As for which is the best Jardine company, the answer is it depends. Some people might like champagne-pink truffles while others might like the chocolate with an almond centre. As for me, I like any chocolate that tastes good.

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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.