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Three Things To Like About Singapore Post

Ser Jing - Singapore Post Full Year Results, Mailman's Here with Higher Sales but Lower Profit (pic)Electronic mail may have replaced snail-mail for many of us but there is little evidence that it has made a dent in the revenues of Singapore Post (SGX: S08).

Since 2002, revenues at SingPost have grown from S$403m to S$707m last year. That is the first thing to like about the company – its ability to adapt to a changing technological environment. Over the last decade the company has switched its focus from mail to logistics, which has become its main driver of growth.

In 2002, revenues from traditional mailing services have increased from around S$300m to S$440m – an increase of about 4% a year. Meanwhile, revenue from logistics, which includes warehousing and door-to-door shipping services, has quintupled from S$46m to S$250m. Logistics now accounts for almost a third of total sales.

SingPost’s high Net Income Margin is something else to like about the business. At 19%, it implies that the company is making $19 of bottom-line profit for every $100 of sales. It is higher than the median Net Income Margin of 14% for Singapore’s 30 largest companies in the Straits Times Index (SGX: ^STI).

An absence of share-price volatility is the third thing to like about SingPost. It could appeal to investors who abhor violent share-price movements. The volatility of the company’s shares is a calming 12%, which is lower than the overall market’s 17%. Coupled with the company’s stable payout history, its yield of 4.4% could appeal to income investors who like the idea of dividends without disorder.

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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.