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Singapore’s Big Winner of the Week: A Stock that Yields a Mighty 22%

This week’s big winner happens to be T T J Holdings Ltd (SGX: K1Q). Shares of the firm rose 12% during the week to S$0.37, easily outpacing the 1.6% decline that was experienced by Singapore’s market barometer, the Straits Times Index (SGX: ^STI), over the same period.

Having been listed since 2010, T T J is mainly involved in the “design, supply, fabrication and erection of a wide spectrum of structural steelworks for use in the construction of buildings, factories, plants, infrastructures and operation of dormitories”.

T T J had just announced its financial results for the 12 months ended 31 July 2015 (FY2015) on Wednesday.

For the year, revenue dropped a steep 30% from S$134.7 million in FY2014 to S$94.1 million. Consequently, net profit declined by 29% year-on-year to S$15.5 million.

T T J attributed the decline in revenue to a poor showing in its structural steel business. Sales from that business segment had dropped by 36% year-on-year to S$74.1 million largely because of “lesser work completed for on-going projects as compared to previous reporting period.” The company also saw fewer large-scale projects of higher contract value executed in FY2015 as compared to FY2014.

In spite of lower profits recorded for the year, the construction outfit had decided to recommend a first and final dividend of 8.0 Singapore cents for FY2015. This is more than a fourfold increase from the 1.4 cents in dividend seen in FY2014.

Going forward, T T J said it remains confident of the long term prospects and growth potential of its business. T T J’s Chairman and Managing Director, Teo Hock Chwee, said that the huge spike in dividends is a “testament to [management’s] confidence and the underlying strength of the Group.” As of 23 September 2015, the company’s order book stood at $99 million. T T J ended 31 July 2015 with a strong balance sheet carrying S$84.1 million in cash and just S$166,000 in borrowings.

At its current price, T T J is valued at just 8 times its trailing earnings and sports a dividend yield of a whopping 22%.

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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 contributor Sudhan P doesn’t own shares in any companies mentioned.