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3 Things Investors Should Know about Ventures Corporation

Venture Corporation Ltd (SGX: V03) is an electronics manufacturing services provider with expertise in a wide range of activities. These include printing & imaging, networking & communications, retail store solutions & industrial, computer peripherals & data storage and test & measurement / medical & life science / others.

Investors or potential investors of Ventures may want to know the following three things about the company.

Continuous but volatile profit for the last 10 years

One the key criteria of a good business is whether it could generate consistent and growing revenues and profits in the long term – 5 to 10 years.

Here, Ventures shows that it has been profitable for 10 years, yet both revenue and profit have been volatile during that period.

In 2006, revenue and profit stood at $3.125 billion and $ 241 million, respectively. Both revenue and profit reach a peak in 2007, before sliding to a low of $ 2.33 billion and $ 131 million in 2012.

In 2015, both revenue and profit stands at $2.65 billion and $ 154 million.

Dividend history

Ventures has continuously paid dividend for the last 10 years. Dividend per share has been consistent in the range of about $ 0.50 in the last 10 years. In 2015, the dividend per share was $ 0.50.

Though its profitability has been volatile in the last 10 years, the company continues to pay a dividend each year. This could give investors some confidence that the company is committed to paying out dividend to investors.

At the latest price of $9.34, dividend yield is 5.4%.

Valuation

It is important that investors gauge a company’s valuation. Is it cheap, or expensive?

Yet, there is no simple answer to the question. So what we can do is compare the valuation of Ventures to a benchmark, such as the SPDR Straits Times Index ETF (SGX: ES3). We will look at two separate metrics, namely, price-to-book and price-to-earnings

Currently, the index is trading at price-to-book and price-to-earnings of 1.15 and 12.25 respectively. Comparatively, Venture is trading at price to book and price to earnings of 1.35 and 15.74, respectively.

In other words, Ventures is slightly more expensive than the 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.