iFAST Corporation Limited (SGX: AIY) is a financial technology (fintech) company which owns a platform for the sale and distribution of financial and investment products such as equities, bonds and unit trusts. The company was incorporated in 2000 and is one of the early fintech companies in Singapore.
iFast was listed in 2014 and has since demonstrated steady growth over the last few years. Here are three compelling reasons why an investor may wish to consider owning shares in iFast.
1. Record assets under administration
In iFast’s most recent quarterly earnings results, the group reported another record level for their assets under administration (AUA). AUA stood at S$8.75 billion as at 31 March 2019, rebounding from S$8.05 billion at the start of 2019. The group’s AUA is a good indication of the gross and net revenue earned and iFast’s rise in revenues over the years has tracked closely along with its AUA.
Do note though that AUA may be impacted by stock market volatility and economic conditions, and there is no guarantee that AUA will rise in a straight line. Investors need to brace themselves for volatility in AUA when there is market turmoil, but the overall direction of AUA should be up, as there continues to be large untapped opportunities in Asia.
2. Generates consistent free cash flow
A second important trait of iFast is its consistent free cash flow generation, which can be seen from the table below.
Apart from 2016, iFast has generated good and consistent free cash flow over the years, which is a plus point for investors as such consistency provides peace of mind.
3. Pays quarterly dividends
A third good reason for owning iFast is the group’s policy to pay out a quarterly dividend, thus providing investors with a consistent income every three months. The current payment schedule is 0.75 Singapore cents per quarter for the first three quarters of the year, and 0.90 Singapore cents in the final quarter, bringing the total dividend for the full year to 3.15 Singapore cents per share. Based on iFAST’s closing share price of S$1.10 on 10 May 2019, this translates to a dividend yield of 2.8%.
The Foolish takeaway
iFast has a promising runway for growth as the group works hard to increase AUA levels over time. The group also generates healthy and consistent free cash flows and has a quarterly dividend policy whereby investors can enjoy regular doses of passive income. These three reasons should give investors food for thought and form a good basis to consider buying iFAST’s shares.
The information provided is for general information purposes only and is not intended to be personalized investment or financial advice. Motley Fool Singapore contributor Royston Yang owns shares in iFast Corporation Limited. The Motley Fool Singapore has recommended shares of iFast Corporation Limited.