An Investor’s Comparison Of The Business Fundamentals of Singapore Post Limited and POS Malaysia Bhd

Singapore Post Limited (SGX: S08) and POS Malaysia Bhd (KLSE: 4634.KL) are two companies that deal with postal services. The former is listed and based in Singapore, while the latter does business mainly in Malaysia and is found in Bursa Malaysia, Malaysia’s stock exchange.

Investors who are comfortable investing in both Singapore and Malaysia might look at both Singapore Post and POS Malaysia and wonder which is the better mail and logistics company.

Here’s some data on both companies’ business fundamentals that could help said investors.

On growth

The first thing I’m looking at would be the track record of growth for Singapore Post and POS Malaysia. Here’s a table showing both companies’ revenue and net profit over their last five completed fiscal years:

Source: S&P Global Market Intelligence

It’s clear that Singapore Post has the faster growth rates.

On the net profit margin history

Next up, we have a history of the net profit margins for Singapore Post and POS Malaysia over the same period shown above:

Source: S&P Global Market Intelligence

Again, Singapore Post is the company with the higher net profit margin.

On the return on equity

The ROE metric measures a company’s ability to generate a profit with the shareholders’ capital it has. In general, the higher the ROE, the better it could be. That said, the use of high debt can juice up a company’s ROE, but debt introduces financial risk. So, that’s something to keep in mind too.

With that, let’s look at the returns on equity for both companies in their last five completed fiscal years:

Source: S&P Global Market Intelligence

Both have seen their returns on equity fall, but we can still see that Singapore Post has been able to generate a better ROE as compared to POS Malaysia.

A Foolish conclusion

This quick overview we have on Singapore Post and POS Malaysia represent a good starting point for investors to appreciate the differences between the two companies. By putting the two companies side by side, investors can ask better questions, thus allowing them to better understand the underlying businesses of both.

The numbers above may also prompt some of you to ask more questions, such as why Singapore Post has managed to grow its revenue at a much faster rate? If you dig into the business of both companies, you’d realise that Singapore Post has been busy with acquisitions whereas POS Malaysia’s growth has been mainly organic.

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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.