ComfortDelGro Corporation Ltd (SGX: C52) is a land transportation conglomerate with business interests in bus, taxi and rail services.
Apart from Singapore, it has a presence in six other countries, namely, China, United Kingdom, Australia, Malaysia, Ireland, and Vietnam.
From 1 Jan to 31 Dec 2018, ComfortDelGro delivered a total return, which includes reinvested dividends, of 13.7%. That easily outperformed the Straits Times Index (SGX: ^STI) that saw a decline of 6.5%.
With ComfortDelGro’s stronger share price performance, is it still a bargain?
To find out we will be using three metrics, namely, its price to earnings (P/E) ratio, its dividend yield and its net debt to equity ratio.
ComfortDelGro is currently trading at S$2.14 and has a trailing twelve months (TTM) earnings per share (EPS) of S$0.13. This implies a P/E ratio of 16.7. Its three-year (2015 to 2017) EPS for comparison, was between S$0.12 to S$0.14. This indicates that the current EPS sits within the range.
At end September 2018, the transportation conglomerate had a net cash position of S$43.7 million, while equity stood at S$2.57 billion. So, ComfortDelGro is in a net cash position, in other words, a very strong balance sheet. In the last three years, ComfortDelGro has consistently maintained a net cash position.
Lastly, the ComfortDelGro’s dividend has increased over the last three years from S$0.09 in 2015 to S$0.104 in 2017. Assuming the company pays out a dividend at the same rate as 2017 this would suggest a yield of 4.9% at current prices.
Looking at the three metrics, ComfortDelGro share price seems attractive. Its EPS looks strong, it has a strong balance sheet, and dividends have been growing.
It could be worth a closer look.
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The Motley Fool Singapore writer, Esjay, contributed towards this article. Esjay does not own shares in ComfortDelGro.
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore Director David Kuo doesn’t own shares in any companies mentioned.