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Biggest Consumer Services Stocks Averaged 8.8% Gain In 2014 YTD

My Gateway (92 x 92)If someone gave you a dollar, you might save or spend it. While long-term economics show it is best to invest savings, present day economics provide the range of goods and services for our spending. Services that are specifically directed to consumers are an important part of all economies and all stock markets.

A distinguishing aspect of consumer services is that companies are focused on providing them to individuals, rather than other companies. These companies can be involved in activities such as retailing, automobile services, transportation, accommodation, leisure and media. In recent years, technology has enabled many of these services to reach new consumers, while evolving bricks and mortar businesses into brick and click businesses.

A lesser-known fact about stock markets is that all stocks are grouped and broken down into industries and sectors. These groupings are usually attuned to key segments of economies. Consumer services are such an industry, made up of almost 80 stocks listed on Singapore Exchange (SGX). Across Asia Pacific, there are more than 2000 primary listings that represent the consumer services industry. Across the world, Bloomberg estimates that there are more than 6000. Just as consumer services are economically important to the region, they are an important part of stock markets. Hence, while individuals are poised to spend on consumer services, they can also save and invest in the companies that provide them.

The ten largest capitalised consumer services stocks listed on SGX that are categorised by the Industry Classification Benchmark (ICB) have a combined market capitalisation of S$89.8 billon. The average year-to-date price gain was 7.2% and the median gain was 5.0%. Reinvested dividend distributions boost those returns to 8.8% and 7.3% respectively. These ten stocks currently maintain an average indicative dividend yield of 2.3%.

Dairy Farm International Holdings (SGX:D01)

Dairy Farm International Holdings is the largest capitalised stock in the consumer services sector, with a market capitalisation of S$18.1 billion. The Group is a pan-Asian retailer that operates supermarkets, hypermarkets, convenience stores, health and beauty stores and home furnishings stores. Dairy Farm International Holdings has a 50% interest in Maxim’s, Hong Kong’s restaurant chain and is a member of the Jardine Matheson Group. On 25 April 2014, the Group reported net revenue and gross profit for the first quarter ended 31 March 2014 of Rp 3132 billion and Rp 752 billion respectively for PT Hero Supermarket Tbk, an 80.8%-owned subsidiary (click here to view). Dairy Farm International Holdings will report its half-yearly results and dividend for the six months ended 30 June 2014 on 31 July 2014. The stock went ex-dividend on 19 March 2014, distributing US$0.165 dividends. It currently maintains an indicative dividend yield of 2.1%. Dairy Farm International Holdings generated a 13.6% total return gain in the 2014 YTD.

  Jardine Cycle & Carriage (SGX:C07)

Jardine Cycle & Carriage has a market capitalisation of S$16.4 billion, the second largest capitalised stock in the consumer services sector. Jardine Cycle & Carriage generated the second largest total return gain in the 2014 YTD among the ten largest capitalized consumer services stocks of 32.9%. Jardine Cycle & Carriage is a member of the Jardine Matheson Group and has an interest of just over 50% in Astra, an Indonesian automotive group with businesses in financial services, heavy equipment and mining, agribusiness, infrastructure, logistics and other and information technology. Jardine Cycle & Carriage also has motor interests across Southeast Asia. On 30 April 2014, the Group reported revenue

of US$4.7 billion and profit attributable to shareholders of US$218 million for the first quarter of 2014 ended 31 March. The stock went ex-dividend on 15 May 2014, distributing US$0.90 dividends. As of Friday, its indicative dividend yield stood at 2.9%.

  Genting Singapore (SGX:C13)

Genting Singapore, the third largest capitalised consumer services stock, has a market capitalisation of S$16.2 billion. Genting Singapore and its subsidiaries specialise in gaming and integrated resort development in Australia, the Bahamas, Malaysia, the Philippines, Singapore and the United Kingdom. On 5 May 2014, the company reported revenue of S$828.8 million, adjusted EBITDA of S$400.3 million and net profit of S$257.6 million for the first quarter of 2014 ended 31 March. Genting Singapore generated a 10.7% total return decline in the 2014 YTD. The stock went ex-dividend on 5 May 2014, distributing S$0.01 dividends. It currently maintains an indicative dividend yield of 0.8%.

  Singapore Airlines (SGX:C6L)

Singapore Airlines is an airline group that offers flights to destinations spanned over six continents. With a market capitalisation of S$12.3 billion, the Group generated a 2014 YTD total return gain of 0.8%. On 8 May 2014, Singapore Airlines reported operating profit of S$259 million for FY2013-14. Singapore Airlines will report its first quarter financial results for the year ending 31 March 2015 on 30 July 2014 after trading hours (click here to view). The stock will go ex-dividend on 1 August 2014, distributing S$0.36 dividends. Its indicative dividend yield as of Friday was 2.0%. 

Singapore Press Holdings (SGX:T39)

Singapore Press Holdings is a media organisation with businesses in print media, digital media, broadcasting, events and out-of-home advertising and property investments. Singapore Press Holdings has a full market capitalisation of S$6.6 billion. In the 2014 YTD, it generated a total return gain of 2.2%. On 15 July 2014, the Group reported net profit attributable to shareholders of $89.6 million and operating profit of $98.4 million for the third quarter ended 31 May 2014. This stock went ex-dividend on 6 May 2014, distributing S$0.07 dividends. As of Friday, its indicative dividend yield stood at 3.6%.

Shangri-La Asia (SGX:S07)

Shangri-La Asia has a full market capitalisation of S$5.9 billion. Shangri-La Asia is primarily engaged in investment holding and owns and/or operates hotels and resorts across Asia Pacific, Europe, North America and the Middle East. Its subsidiaries are primarily involved in the ownership and operation of hotels and associated properties and the provision of hotel management and related services. On 19 March 2014, the company reported consolidated profit attributable to equity holders of US$392.3 million for the year ended 31 December 2013, a 9.3% increase from the previous year. Shangri-La Asia generated a 2014 YTD total return decline of 21.6%. The stock went ex-dividend on 2 June 2014, distributing HK$0.04 dividends. It currently maintains an indicative dividend yield of 1.0%.

  ComfortDelGro Corporation (SGX:C52)

ComfortDelGro Corporation was formed through the merger of land transport companies Comfort Group and DelGro Corporation. The Group’s businessses include the rental and lease of buses, taxis, rails and cars, automotive engineering services, testing services, driving centre services, insurance broking services, outdoor advertising and car dealership. ComfortDelGro Corporation’s operations are diversified across the United Kingdom, Australia, Vietnam, Malaysia and China. ComfortDelGro Corporation has a market capitalisation of S$5.6 billion. On 12 May 2014, the Group reported revenue of $950.8 million, operating profit of $101.5 million and net profit of $63.3 million for the first quarter of 2014 ended 31 March, an increase of 9.2%, 5.8% and 9.7% respectively from the corresponding period in the previous year (click here to view). ComfortDelGro Corporation will report its financial results for the second quarter of 2014 ended 30 June on 13 August 2014 after trading hours. In the 2014 YTD, ComfortDelGro Corporation generated the third largest total return gain among the ten largest capitalised consumer services stocks of 29.8%. The stock went ex-dividend on 2 May 2014, distributing S$0.04 dividends. Its indicative dividend yield as of yesterday stood at 2.7%.

Genting Hong Kong

Genting Hong Kong is a leisure, entertainment and hospitality company, with land and sea-based businesses. Its primary business activities include cruise and cruise related operations under the brands of Star Cruises and Norwegian Cruise Line. Headquartered in Hong Kong, Genting Hong Kong has global presence in over 20 locations. On 19 March 2014, Genting Hong Kong together with its subsidiaries reported Group profit of US$552.0 million for the full year of 2013 ended 31 December, an increase of 178.8% from 2012. Genting Hong Kong has a market capitalisation of S$3.9 billion. In the 2014 YTD, it generated a total return decline of 9.7%. The stock went ex-dividend on 18 June 2014, distributing US$0.01 dividends. It currently maintains an indicative dividend yield of 2.6%.

SMRT Corporation

With a market capitalisation of S$2.5 billion, SMRT Corporation generated the largest 2014 YTD total return gain of 38.4% among the ten largest capitalised consumer services stocks. SMRT Corporation is a multi-modal public transport operator that manages a transport network consisting of the MRT and light rail system, bus and taxi operations. SMRT Corporation is also engaged in marketing and leasing of the commercial and media spaces within its transport network, while offering engineering consultancy and project management as well as operations and maintenance services. On 30 April 2014, the Group reported revenue and Profit After Tax and Minority Interests (PATMI) of S$1.2 billion and S$61.9 million respectively in FY2014. SMRT Corporation will release its financial results for the first quarter of FY2015 ended 30 June 2014 on 30 July 2014. The stock will go ex-dividend on 22 July 2014, distributing S$0.012 dividends. As of Friday, it maintained an indicative dividend yield of 1.4%.

  Mandarin Oriental International

Mandarin Oriental International has a market capitalisation of S$2.4 billion. It generated a total return gain of 12.4% in the 2014 YTD. Mandarin Oriental International is the parent company of the Mandarin Oriental Hotel Group, an international hotel investment and management group. The Group has 44 hotels across 25 countries, in regions including Asia, the Americas, Europe, the Middle East and North Africa. Mandarin Oriental Hotel Group is a member of the Jardine Matheson Group. On 6 March 2014, the Group reported underlying profit of US$93 million and profit attributable to shareholders of US$96 million for the year ended 31 December 2013. Mandarin Oriental International will report its half-yearly results and dividend for the six months ended 30 June 2014 on 31 July 2014 (click here to view). The stock went ex-dividend on 19 March 2014, distributing US$0.05 dividends. It currently maintains an indicative dividend yield of 3.8%.

As exemplified above, the consumer service sector is made up of many businesses that provide everyday services. If you have travelled today, shopped at a retail outlet or a pharmacy, booked a hotel, ate at a restaurant, or read a newspaper, then you have probably interacted with companies that are categorized as Consumer Services. How many of us engaged these services and the extent of engagements are measured periodically in the form of consumer confidence indices.

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