SATS Ltd (SGX: S58) is a Singapore-listed company with a sizeable market capitalisation of S$5.41 billion. As a quick background, SATS is the leading provider of gateway services and food solutions in the region. It caters to the needs of the aviation sector and a host of other businesses in hospitality, food, healthcare, freight, and logistics industries besides governments.
Here are three quick numbers to understand how SATS has performed over the past five years.
1. Earnings per share
Earnings per share (EPS) at SATS has seen a compound annual growth rate (CAGR) of 6.3% over the past five years. In the past five years, EPS has grown from 17.5 Singapore cents in fiscal year (FY) 2014/15 to 22.3 Singapore cents in FY 2018/19.
The steady growth over the past five years has been due to a rising number of flights and passengers handled. This is a positive trend for the ASEAN region and one that has just started and is expected to continue for many more years ahead given the rise of the Asian middle class.
2. Free cash flow
Moving to free cash flow (FCF), SATS registered strong growth in FCF over the above mentioned five years. FCF stood at S$175.1 million in FY 2014/15 and this grew to S$208.0 million in 2018/19, representing a 4.4% CAGR over the period.
This increase in FCF shows that the company can generate positive cash flow which is essential for any business. Cash flow is to a business like blood is to the body. It’s essential.
3. Dividend per share
Lastly, the dividend per share (DPS) at SATS has increased from 14 cents to 19 cents over the five-year period. This implies a CAGR of 7.9%. Investors should also note that the dividend is rather safe as the payout ratio has ranged from 73% to 85% during the period.
To sum up, SATS has successfully grown its EPS, raised its dividends and improved its cash flow over the past five years. With these promising numbers, and the ASEAN region poised for more tourism growth ahead in the future, SATS seems to be well-positioned to keep riding on this growth wave.
Motley Fool writer Esjay contributed to this article. Esjay does not own shares in SATS Ltd.
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 SATS Ltd. Motley Fool Singapore contributor Tim Phillips doesn’t own shares in any companies mentioned.