3 Things Investors Should Know About Heineken Malaysia Berhad

Companies that produce alcoholic beverages in Singapore’s stock market are rare – a notable example is Thai Beverage Public Company Limited (SGX: Y92).

There are more of such companies across the causeway in Bursa Malaysia, Malaysia’s stock market. One of them is Heineken Malaysia Berhad (KLSE: 3255.KL).

The company was previously known as Guinness Anchor Berhad and had undergone a name change only in April this year. Its portfolio includes beer brands such as Tiger, Guinness, Anchor, and Heineken. There are other alcoholic beverage brands under Heineken Malaysia.

In here, let’s look at three things about the company that may be useful for investors to know:

1. A history of growing revenue and profit

From its fiscal year ended 30 June 2005 (fiscal 2005) to fiscal 2015, Heineken Malaysia has seen its revenue increase by 83% from RM952 million to RM1.75 billion. Along the way, its profit had doubled from RM108 million to RM214 million, representing a compound annual growth rate of 7.1%.

2. A track record of rising dividends

In the same period seen above, Heineken Malaysia has managed to consistently pay an annual dividend. Furthermore, the company has more than doubled its dividend from RM0.30 per share in fiscal 2005 to RM0.71 per share in fiscal 2015.

The company has a dividend yield of 4.3% thanks to its fiscal 2015 dividend and current share price of RM16.40.

3. A valuation that’s in-line with peers

Heineken Malaysia is currently trading at a price-to-earnings ratio of 20. That’s near the middle of where the company’s valuation has been over the past five years as the chart below illustrates.

Heineken Malaysia's PE ratio since 5 July 2011
Source: S&P Global Market Intelligence

Meanwhile, Carlsberg Brewery Malaysia Bhd (KLSE: 2836.KL), one of Heineken Malaysia’s main competitors, has a price-to-earnings ratio of 18.2. This shows that Heineken Malaysia is not trading at a premium over its peer.

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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.