Singapore’s 10 Largest Consumer Companies (Hint: Almost All Pay A Dividend)

The Singapore stock market has its fair share of consumer companies.

A consumer company would be one that supplies goods or services to consumers. In Singapore, nine out of the 10 largest listed consumer companies pay a dividend as well. A recent report provided some insights to the dividend yields and the returns on equity of these consumer firms.

Here’re some highlights from the report (figures as of 27 May 2016, unless otherwise stated):

  1. Consumer companies, as a whole, make up 14.4% of the Straits Times Index (SGX: ^STI). The top 10 largest consumer companies belong in diverse businesses – they span six different consumer facing industries.
  2. The 10 largest consumer companies sport a healthy return on equity (ROE). The ratio is a measure of how much profit a business can generate for every shareholder dollar it has. It can be a quick way to compare the business quality of different companies. Here, the dectet have an average ROE of 16.3%, based on their latest filings. Over the past five years, the group’s average ROE was over 18%.
  3. Genting Hong Kong Limited (Malaysia) (SGX: S21) logs in the highest ROE of the lot, at around 49%. But, the cruise operator is the lone consumer company that does not pay a dividend. Dairy Farm International Holdings Ltd  (SGX: D01) comes in at second place with an ROE of over 30%. The pan-Asian retailer has a dividend yield of 3.1% which is among the highest of the dectet.
  4. Elsewhere, Thai Beverage Public Company Limited (SGX: Y92) also carries an above average ROE. The food and beverage outfit has an ROE of nearly 25% and sports a dividend yield of 2.7%.
  5. Singapore Press Holdings Limited  (SGX: T39) is the company with the highest dividend yield. The newspaper publisher and property developer sports a dividend yield of 3.8%. Investors may want to note that SPH is currently facing a difficult transition away from its traditional advertising business and has been gradually reducing its dividend. The company’s ROE, at just 8.9%, is on the lower end of the scale.

Dividend yields and ROEs are just two ways of comparing different companies. A good ROE and reasonable dividend yield is good to have, but the homework does not end there. Each company, for instance, comes with a different risk profile. We also have to see if the ROE can be maintained for the future.

As Foolish investors, we might want to put our thinking hats on to find the businesses which are sustainable and if possible, grow over the long term.

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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 Chin Hui Leong owns shares in Dairy Farm International Holdings.