Three Things To Like About Singapore Telecommunications Limited

If you prefer big things then that could be the first thing to like about Singapore Telecommunications Limited (SGX: Z74).

The telecom behemoth is the second-largest company on the Singapore market. It accounts for around a tenth by weight of the benchmark Straits Times Index (SGX: ^STI). But SingTel is not just big it is also sprawling.

It owns Australia’s second-largest telecom operator, Optus, and it has a one-third stake in India’s Bharti Airtel, which is the world’s third-biggest mobile company. It also has a near 50% stake in Philippine’s Globe Telecom and Indonesia’s Telkomsel, which, itself, is a subsidiary of Indonesia’s largest telecom company, Telkom.

SingTel is also one of Singapore most efficient companies. That is the second thing to like about the company. Its Return on Equity of 14% is almost twice that of Singapore’s blue chips. It means that the company generates S$14 for every $100 of shareholder equity.

Interestingly, the above-average return has been achieved through modest means. Its Net Income Margin is only modestly higher that the market average; its Asset Turnover is only modestly lower than the blue-chip average and its Leverage Ratio is almost on par with other Straits Times companies.

The third thing to like about SingTel is its consistent dividend payout. Since the turn of the Millennium, the company has either maintained or raise its payout. In 2000, the payout was S$0.06 per share. Last year the payout was S$0.17 per share, which equates to an annualised increase of 8% a year.

At the current share price of S$3.89, Singapore Telecommunications sits on an historic dividend yield of 4.3%.

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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.