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Three Things To Like About Keppel Corporation

If you like built-in diversification then that could be the first thing to like about Singapore’s home-grown conglomerate Keppel Corporation (SGX: BN4).

Keppel Corp has interests in rig building, ship repair, telecoms, logistics and oil exploration. It even has its own Real Estate Investment Trust. And if that wasn’t enough to keep it busy, it has a private-equity division too. The fund’s investments include online education, investment banking and a car dealership in China.

So in one fell swoop investors can access a range of industry types through a one-stop-shop.

The various moving parts of Keppel Corporation move at different speeds and have also delivered vastly different returns. But when you put all the pieces together, the conglomerate has delivered a respectable return. Over the last ten years, shares in Keppel Corporation have more than trebled.

That is the second thing to like about Keppel Corp. The conglomerate has delivered share price growth for investors who might be looking for capital gains. But there is something for income investors too. Currently, with the shares at S$10.80, Keppel Corp sports a historic yield of 3.7%.

When you put the two parts, namely capital growth and income, together, Keppel Corporation has delivered an annual total return of around 18%. In other words, an investment of S$1,000 in 2004 would have quintupled after ten years to over S$5,000.

The third thing to like about Keppel Corporation is geographic diversification. While the company generates the lion’s share of its business in Singapore, it has a wide geographic footprint outside of the Garden City. Around three-quarters of its revenues are generated domestically; about a tenth from America and the rest from the Far East and other ASEAN countries.

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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.