Straco Corporation Ltd (SGX: S85) is a tourism asset operator with operations in China and Singapore.
In China, the company owns the Shanghai Ocean Aquarium, Underwater World Xiamen, and Lintong Lixing Cable Car attractions. In Singapore, Straco bought a majority stake in the iconic Singapore Flyer — one of the largest observation wheels in the world — in late 2014.
Here at the Fool, we generally look at investments in three buckets: growth, value, and income/dividend investments, and we know investors have different preferences and styles that make each type of investment appealing — or not.
We’re looking at two reasons Straco might be of interest to one of these groups of investors –namely dividend investors.
A strong track record of business performance
One important criterion dividend investors should focus on when assessing a dividend company is how well its underlying business has performed over the past few years.
A good track record will provide assurance to dividend investors that the company will likely sustain its business performance and, subsequently, its dividend payments for the foreseeable future.
Straco has a pretty strong track record over the past few years. In the last five years, its revenue has grown from S$92.3 million in 2014 to S$117.9 million in 2018, or a 6.3% compound average growth rate (CAGR). Meanwhile, profit attributable to shareholders grew from S$37.7 million to S$41.8 million.
It looks to be a stable performance in revenue and profitability, but does that growth translate into good dividend payments for investors?
One of the key criteria investors look for in a company is its track record of dividend payments. The key here is to look for stable or, even better, increasing dividend payments over the years.
Straco has grown its dividend per share from S$0.02 in 2014 to 3.5 Singapore cents in 2018. In other words, the dividend was up by 75% during the period.
The past is no guarantee of the future. Still, Straco’s track record of growing its dividend payment gives us some confidence that it will maintain a similar dividend policy in the future. Thus, as long as it can grow its profitability over time, dividend investors should expect to see higher dividend payments in the future.
Dividend investors might want to take a closer look at Straco given its strong business and dividend track records.
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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 recommends Straco Corporation Ltd.