Though 2019 has been peppered by events such as the trade wars and Sino-USA hostilities, the Straits Times Index (SGX: ^STI) has still managed to rise 8.5% year-to-date. As the saying goes, the market climbs a wall of worry.
If investors search carefully, though, they will uncover companies which have managed to do even better than the index. These companies have strong business moats and catalysts, and investors have recognised their quality by bidding up their share prices. Here are three companies which have outperformed the STI this year.
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1. Silverlake Axis Ltd
Silverlake Axis Ltd (SGX: 5CP) is a company that provides digital economy solutions to the banking, insurance, retail, government, payment and logistics industries. The group has more than 380 corporate customers in over 80 countries across Asia, the Middle East, Europe, Africa, Latin America, Australia and New Zealand.
Silverlake’s share price has risen from S$0.40 to S$0.52, and is up 30% year-to-date, handily beating the STI. The group (which has a 30 June fiscal year-end) reported a sterling set of earnings for its third quarter 2019 (Q3 2019), with revenue rising 23% year-on-year and net profit attributable to shareholders climbing 54% year-on-year (after stripping out exceptional items).
The group had just acquired a new subsidiary – SIA X Infotech Group – which contributed positively to both project-related and recurring income. Free cash flow was very strong at RM 271 million, and the group declared a third interim dividend of 0.4 Singapore cents per share. As a recap, its first interim dividend was 0.3 Singapore cents and second was 0.4 Singapore cents, for a nine-month total dividend of 1.1 Singapore cents. Inclusive of the final cum special dividend of 0.8 Singapore cents for Q4 FY 2018, Silverlake has a trailing total dividend of 1.9 Singapore cents, and a trailing dividend yield of 3.7%.
2. Haw Par Corporation Ltd
Haw Par Corporation Ltd (SGX: H02) is a Singapore conglomerate which has four main divisions – healthcare (made up of its famous Tiger Balm brand), leisure, property and investments. Haw Par’s share price has risen by around 17.2% this year, from S$12.00 to S$14.06.
The group’s healthcare division exhibits continued strong growth, with segment profit for FY 2018 growing to S$77.3 million from S$68.6 million a year ago. Haw Par had also declared a special 85 Singapore cents dividend for FY 2018 to celebrate its 50th anniversary.
Haw Par’s healthcare division continues to display strong growth, with Q1 2019 revenue up 22.3% year-on-year. The group’s trailing dividend yield is around 2.1%.
3. ComfortDelGro Corporation Ltd
ComfortDelGro Corporation Ltd (SGX: C52), or Comfort, is a land transport giant which has business divisions dealing in taxis, buses, rail, car leasing, driving centres and vehicular inspection and testing. The group’s operations extend to countries such as the UK, Ireland, Australia, Vietnam and Malaysia as well as 11 cities across China.
Comfort’s share price has soared by 32.7% year-to-date from S$2.14 to S$2.84, and this was on the back of announcements from Comfort on its continued acquisitions, as part of its growth strategy to diversify away from Singapore. As a recap, Comfort had acquired around ten companies within the last 18 months in Australia, Singapore and the UK.
The results of these acquisitions are beginning to show – for its Q1 2019 earnings, Comfort reported a year-on-year rise of 7.8% in revenue, while attributable profit after tax rose 6.2% year-on-year. In June, Comfort announced strategic investments in technology start-ups through its US$100 million venture fund ComfortDelGro Ventures, which should help the group to boost its capabilities in smart urban mobility and transportation.
The information provided is for general information purposes only and is not intended to be personalized investment or financial advice. The Motley Fool Singapore has recommended shares of Haw Par Corporation Ltd. Motley Fool Singapore contributor Royston Yang does not own shares in any of the companies mentioned.