There are three main types of stocks in the stock market: value shares, growth shares, and dividend shares. Of the three, growth shares allow investors to accelerate their stock market returns. Younger investors should consider investing in growth shares since they have a much longer time horizon to let the magic of compounding to take place. With that, here are three growth shares for you to consider if you’ve still got quite a bit of life ahead of you.
Millennial stock No. 1
Raffles Medical Group Ltd (SGX: BSL) is a private healthcare group with operations in 14 cities spread across five countries. It serves more than two million patients and 7,000 corporate clients.
As a top stock pick for June 2019, there are many reasons to be optimistic about Raffles Medical’s business. For one, the company has expanded beyond Singapore into China. It opened its first hospital in Chongqing in January this year, and the second hospital in the country (in Shanghai) is expected to commence operations in the second half of 2019.
In its press release upon the opening of Chongqing hospital, Raffles Medical said the following about the addressable market in the city:
“With a population size of 34 million, Chongqing is one of the four municipal cities supported by the Beijing government. Apart from providing quality healthcare to the rising middle and upper income population in Chongqing, the Hospital aims to meet a currently unmet demand for international quality healthcare service in Chongqing and its surrounding regions. Raffles Hospital Chongqing will also be meeting the healthcare needs of the increasing number of foreigners working and setting up their bases in Chongqing for the region.”
At Raffles Medical’s current share price of S$1.06, it has a price-to-earnings (P/E) ratio of 28 and a dividend yield of 2.4%.
Millennial stock No. 2
DBS Group Holdings Ltd (SGX: D05) is one of the three major banks in Singapore.
DBS, as a lender to Asia, can ride on the region’s megatrends, such as a rising middle class, urbanisation, and the rapid adoption of technology. The bank seeks to be the intermediary between trade and capital flows in Asia, on top of supporting wealth creation in the region. Its established and growing presence in Greater China, South Asia, and Southeast Asia allows it to capture growth in the eastern part of the world.
Furthermore, DBS is expanding its digital capabilities and transforming into a digital bank. This is something millennials can connect with easily. By going digital, the bank can lower its cost-to-income ratio, thereby increasing profitability.
DBS’s shares are currently trading at S$25.75 apiece. At that price, it has a price-to-book ratio of 1.4 and a dividend yield of 4.7%.
Millennial stock No. 3
SATS Ltd (SGX: S58) is a provider of food solutions and gateway services solutions, mainly to the aviation sector.
As discussed in Royston Yang’s article here, SATS is looking to invest more for growth. For instance, it is expanding its business in the food services sector in both China and India. The consumer food service market in those countries is huge; the sector is expected to grow at 4% per year from 2017 to 2023 in China, while in India, it is expected to grow at a faster clip of 6% per annum. The large and growing addressable market allows plenty of room for SATS to grow, too.
As for its gateway services business, strong growth in tourism in Singapore and the expansion of Changi Airport, among other things, underpins SATS’s long-term growth.
At SATS’s current share price of S$5.18, it has a P/E ratio of 23 and a dividend yield of 3.7%.
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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. The Motley Fool Singapore has recommended shares of Raffles Medical, DBS and SATS. Motley Fool Singapore contributor Sudhan P owns shares in Raffles Medical and SATS.