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These 3 Companies Have Grown With Singapore Since The Beginning – Will Their Growth Continue?

Looking back at the history of Singapore, its growth and transformation have been remarkable.

The nation did not grow alone though – there are more than a handful of companies today that have grown their businesses alongside Singapore through the decades and more.

Let’s take a look at three of them and see what their future may be.

The insurer

Great Eastern Holdings Limited (SGX: G07) is the largest life insurer in Singapore. It was founded more than a century ago in 1908 and currently has a strong presence in both Singapore and Malaysia.

Over the past 15 years, the insurer has been consistently producing a respectable return on equity of at least 9%.

Great Eastern has also managed to grow its earnings and tangible book value at compounded annual rates of 11% and 10.5% respectively over the past five years. (In particular, the growth in tangible book value is a good proxy for the growth in the real economic worth for an insurer.)

With such a track record, Great Eastern may just be able to continue growing for many more years to come.

The builder

150 years ago, Richard Riley and William Hargreaves started a construction outfit that came to be known as United Engineers Limited (SGX: U04). From those roots, United Engineers is today a conglomerate with interests in property, manufacturing, engineering, and distribution businesses.

Back in 2014, United Engineers’ major shareholders – comprising Oversea-Chinese Banking Corp. Limited (SGX: O39), Great Eastern, and the Lee Foundationwere in talks to sell their collective 34.1% stake in the firm. But, as Channel NewsAsia reported last month, those talks eventually came to naught.

In any case, despite United Engineers’ long history, its recent performance has been quite volatile. This is perhaps best exemplified by how its gross profit margins and net income have both declined dramatically since 2011; the former has collapsed from 35.1% to 12.9% in 2014 while the latter has dropped from S$270 million to S$124 million.

With such a track record in recent times, it is hard to be certain over how the company will evolve through the next decade.

The banker

As Singapore steadily positioned itself as the financial hub of Southeast Asia over the years, many banks situated here managed to enjoy a tailwind. United Overseas Bank Ltd (SGX: U11) would be part of that group.

As one of the oldest banks in Singapore, UOB has been very consistent in its growth. The banks’ earnings per share has increased from just S$0.32 in 1998 to S$1.98 in 2014. Over the same period, UOB has also steadily jacked up its dividends from S$0.17 per share to S$0.70 per share.

Besides being able to grow, UOB’s banking business also enjoys decent economics; since 2004, the bank has achieved a respectable return on equity of at least 10%.

Although Singapore is still important to UOB today (more than 60% of the bank’s total assets are based in Singapore), the bank has steadily expanded its geographical reach and now has operations in 19 countries around the world.

With Singapore’s strong economy as a backdrop and more countries to slowly reach into, there may be brighter days ahead for UOB.

Foolish Summary

Singapore, as the heart of Southeast Asia today, has come a long way from its roots as a sleepy fishing village.

Many companies have managed to hitch onto Singapore’s development over the past century and benefitted. Some of those might be still be in for even better days ahead too.

For more analyses on dividend investing and important updates about the stock market, sign up to The Motley Fool Singapore's free weekly investing newsletter, Take Stock Singapore. Written by David Kuo, it can help you grow your wealth in the years ahead.

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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 writer Stanley Lim does not own any companies mentioned.