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4 Key Things You Should Learn About Comfortdelgro Corporation Ltd’s Dividend

Comfortdelgro Corporation Ltd (SGX: C52) might be a recognisable company for many in Singapore given that it runs Singapore’s largest fleet of taxis.

But there’s a lot more to the company. Comfortdelgro is a global land transport giant that has operations outside Singapore in countries such as Australia, the United Kingdom, and China. The company has a total fleet size of over 46,500 buses, taxis, and rental vehicles across the world. It is also the majority owner of other Singapore-listed companies such as test and inspection outfit Vicom Limited (SGX: V01) and bus and rail services operator SBS Transit Ltd  (SGX: S61).

Comfortdelgro is also a regular payer of dividends. The land transport operator’s latest annual report had four key things related to its dividend that investors might want to know:

1) Revenue is rising 

2016-07-01 Comfortdelgro Revenue
Source: Comfortdelgro’s annual report

Revenue is the starting point of a viable business. Comfortdelgro has recorded growing revenue over the past five years.

For more details on the land transport giant’s business, it operates in 36 cities across seven countries. SBS Transit had served over 1 billion bus passengers and almost 260 million MRT passengers in 2015. It’s safe to say that its services are a daily necessity.

2) …And so are its earnings

2016-07-01 Comfortdelgro EPS
Source: Comfortdelgro’s annual report

As we’ve seen earlier, Comfortdelgro’s revenue is up over the past five years. Its earnings have followed suit. From the chart just above, we can see that the company’s earnings per share (EPS) has risen by 25% from 11.3 cents in 2011 to 14.1 cents in 2015.

Profit provides the fuel for dividends that a company can pay out so it’s something important to watch.

3) The dividend policy

Comfortdelgro declared its dividend policy in its annual report:

“The Company’s dividend policy is to pay out at least 50% of profit after taxation attributable to Shareholders of the Company. The dividend policy takes into account the long-term objective of maximising shareholder value, availability of cash and retained earnings, projected capital expenditure and growth opportunities.

The Company declares dividend semi-annually and informs its Shareholders of the dividend payments via announcements in the SGXNet.”

4) Historical dividend per share

2016-07-01 Comfortdelgro Dividend
Source: Comfortdelgro’s annual report

Comfortdelgro’s dividends have increased alongside its EPS. In fact, the company’s payouts have grown by 50% since 2011. For 2015, Comfortdelgro paid out almost 64% of its EPS as a dividend.

The four points above serve as a starting point for studying Comfortdelgro’s dividend. Other areas worth looking into include its balance sheet and the amount of free cash flow it generates.

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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 Vicom.