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A Close Look At Venture Corporation Ltd’s Growth, Dividend, And Valuation

Electronics manufacturing services provider Venture Corporation Ltd (SGX: V03) has seen its shares deliver a decent gain of 53% in the past five years.

Here are three important aspects about the company that may interest investors, namely, its growth, dividend, and valuation.

1. Growth

The table below shows how Venture’s revenue and operating income have changed over its last five completed fiscal years:

venture-revenue-and-operating-income-table
Source: S&P Global Market Intelligence

The company saw its top-line and bottom-line shrink in 2012, but then resume growth in the years thereafter.

2. Dividend

At its current share price of S$9.98, Venture has a yield of 5% thanks to its trailing dividend of S$0.50 per share. Its yield is higher than the SPDR STI ETF’s (SGX: ES3) yield of 3.2%. The SPDR STI ETF is an exchange-traded fund that tracks the fundamentals of the Strait Times Index (SGX: ^STI).

Next, to assess the sustainability of dividend payment, we can look at two financial ratios: the debt-to-shareholders’ equity ratio and the profit pay-out ratio. Do bear in mind that there are many other things to look at beyond the two ratios.

The debt-to-shareholders’ equity ratio is a gauge for the level of financial risk a company is taking on. Meanwhile, the profit pay-out ratio is the percentage of a company’s profit that is paid out as a dividend. Generally speaking, the lower the two ratios are, the better it could be.

Venture’s trailing earnings of S$0.62 per share gives it a profit pay-out ratio of 81%. It also has a debt-to-shareholders’ equity ratio of just 5%.

3. Value

Venture’s current price gives it a price-to-earnings ratio of 16. There’s one thing to note about this figure – it is higher than the SPDR STI ETF’s PE of 12.

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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.