3 Things Investors Should Know About Singapore Exchange Limited Now

Singapore Exchange Limited (SGX: S68) is the only bourse operator in Singapore.

The company, which is popularly known as SGX, has a number of different business segments, namely Securities, Derivatives, Market Data and Connectivity, Depository Services, Issuer Services, and Others.  For more on the various segments, you can check out here.

In this article, I’d like to look at three things about Singapore Exchange that may be of interest to investors:

1. A high return on capital invested (ROIC)

The ROIC metric can be used to evaluate the quality of a business. In general, the higher the ROIC, the better the quality of a business.

In a previous article, I had calculated that SGX has a ROIC of a staggering 1889% based on its financials for its fiscal year ended 30 June 2015 (fiscal 2015). Even after adjusting the numbers for software assets, the ROIC number for SGX still comes up to 250%.

2. A debt-free balance sheet

As of 31 December 2015, SGX has S$718.9 million in cash & equivalents and zero debt. The company is one of the 30 stocks that make up Singapore’s market benchmark the Straits Times Index (SGX: ^STI). It is the only stock out of the 30 that currently has no debt on its balance sheet according to data from S&P Global Market Intelligence.

3. A consistent payer of dividends

SGX has consistently paid an annual dividend over the last 15 years from fiscal 2001 to fiscal 2015. Along the way, the company’s dividend has quintupled from 5.5 cents per share to 28 cents.

At SGX’s current stock price of S$7.72, it has a dividend yield of 3.6% based on its dividend of 28 cents per share for fiscal 2015.

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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 Lawrence Nga doesn’t own shares in any companies mentioned.