3 Investing Things To Know About SATS Ltd Now

SATS Ltd (SGX: S58), one of the latest entrants to the list of 30 stocks that make up Singapore’s stock market barometer, the Straits Times Index (SGX: ^STI), is a company that has two main business segments: Food Solutions and Gateway Services.

The first covers airline catering, food distribution, and industrial catering activities whereas the second sees the company provide ground handling services of passengers, flights, and cargo mainly in airports.

Here are three important things for investors to know about SATS.

First, the company has had a stable financial performance over its last five completed fiscal years (SATS has a fiscal year that ends on 31 March), as you can see in the table below:

SATS earnings table
Source: SATS annual report.

SATS’s revenue has not exhibited any wild cyclicality (the largest decline was a 1.9% dip in FY2014-15) and it’s the same with its profit attributable to owners (the steepest fall was just 10.7% in FY2011-12).

Second, the market has a return on equity that’s better than the market-average.

The median trailing return on equity for the 30 companies that make up the Straits Times Index is just 8.8%, according to data from S&P Global Market Intelligence. In the case of SATS, it has a trailing return on equity of 14.5%.

Third, SATS has been paying an annual dividend consistently over its last 10 completed fiscal years and it has a yield that’s higher than the market-average.

SATS dividend history
Source: S&P Global Market Intelligece

And to the latter point, SATS’s dividend of S$0.14 per share in fiscal 2015 gives it a yield of 3.5% at its current share price of S$4.05. This is slightly higher than the yield of 3.41% that the SPDR STI ETF (SGX: ES3) carried as of last Friday. The SPDR STI ETF is an exchange-traded fund that tracks the fundamentals of the Straits Times Index.

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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.