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10 Simple Numbers That Help Investors Understand SATS Ltd

SATS Ltd (SGX: S58) is a company that has seen its stock price gain a healthy 80% over the last five years.

It has two business segments, namely, Food Solutions and Gateway Services. The former covers services such as airline catering, food distribution, and industrial catering. The latter is involved in ground handling services of passengers, flights, ferries, and cargo.

In this article, I want to run through 10 simple numbers to help investors gain a quick but useful overview of SATS (figures from S&P Global Market Intelligence, unless stated otherwise).

1. 10-year revenue growth rate

SATS’s revenue in FY2008 (fiscal year ended 31 March 2008) was S$958 million, while its revenue in FY2017 was S$1.73 billion. This works out to a 10-year compound annual growth rate (CAGR) of 6.8%.

2. 10-year net profit growth rate

SATS’s net profit in FY2008 and FY2017 were S$195 million and S$258 million, respectively. This translates into a CAGR of 3.2%.

3. 10-year free cash flow growth rate

The company’s free cash flow for FY2008 was S$140.6 million. This grew at an annual rate of 5.1% to S$220.8 million in FY2017.

4. Passengers served

One of the important numbers to observe for SATS is the number of passengers served. According to documents from the company, in FY2008, it served 31.65 million passengers, while in FY2017, it served 51.53 million. To put the above into perspective, the compound annual growth rate was 5.6% during the period.

5. Gearing

SATS’s total debt to equity ratio is currently just 6.1% This indicates that the company has a strong balance sheet, which gives it ample resources and stability to expand its business if it so wishes.

6. Return on equity

SATS’s trailing return on equity is 15.6%, which is a respectable number, especially when considering the company’s strong balance sheet.

7. 10-year dividend track record

SATS has been paying an annual dividend since at least FY2008. Its ordinary dividend back then was S$0.14 per share, which has since increased to S$0.17 per share in FY2017. At the dividend of S$0.17 per share, SATS has a yield of 3.6%.

8. Price-to-earnings (PE) ratio

At SATS’s current price of S$4.75, it has a PE ratio of 21.1 based on its trailing earnings per share. This is higher than the PE ratio of 11.6 that the SPDR STI ETF (SGX: ES3) has, according to its own website. The SPDR STI ETF is an exchange-traded fund that tracks the fundamentals of our market barometer, the Straits Times Index (SGX: ^STI).

9. Price-to-book (PB) ratio

Right now, SATS has a PB ratio of 3.4, which is again materially higher than the PB ratio of 1.3 carried by the SPDR STI ETF.

10. Relative five-year stock price performance

As mentioned earlier, SATS’s stock price is up by 80% in the last five years. That’s significantly stronger than the 7% gain that the Straits Times Index has achieved in the same period.

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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. The Motley Fool Singapore has recommended SATS.