Singapore Exchange Limited (SGX: S68) or SGX for short, is the only stock exchange in Singapore. In the last five years, SGX’s share price fluctuated between S$7.00 to S$8.50. At a share price of S$7.98 currently, it has gone nowhere during this period.
Despite its “poor” stock performance, there are actually number of things to like about the company. Here, I’ll look at three of those.
Strong financial performance
The first thing to like about SGX now is its strong financial performance for the latest financial year. Here’s a quick overview:
Source: SGX Press Release
Here, we can see that all metrics came in stronger as compared to the same period last year. Such performance is commendable, especially given the increasing challenging macro environment in recent months.
The next thing to like about SGX is its solid dividend track record. To give investors a quick perspective, here are some numbers.
In the last decade, SGX has grown its dividend per share from 26 cents in FY09 to 30 cents in FY18. On one hand, the growth is “only” 15%. Yet, SGX has not missed a single year of dividend payment during this period. What’s more, it has never reduced its dividend per share during this period as well!
Going forward, in the absence of major changes in its business prospects, it’s likely that SGX will sustain its solid dividend track record.
Another thing to like about SGX is its strong balance sheet. This is evident by its low net-debt to shareholder’s equity ratio (net-debt refers to total borrowings and capital leases net of cash and short-term investments). Here are some numbers as of 30 June 2019.
Cash and cash equivalents: S$667 million
From the above, we can see that SGX has a strong balance sheet with a net cash position of S$667 million. Such a position will allow the company to weather any temporary problems. Moreover, it also assures that SGX can continue to maintain its dividend payments during all economic conditions (good or bad).
Overall, I like SGX for its strong financial performance, solid dividend track record, as well as strong balance sheet.
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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 has recommended the shares of Singapore Exchange Limited.