While the business world may be an ever-changing and dynamic place, some investments are resilient and stable, even in the midst of rapid changes. Such businesses usually have sturdy business models and enduring demand for their goods and services, which allows them to grow their businesses steadily for many years to come.
While I do advocate a “buy and monitor” philosophy rather than simply a “buy and hold” one, where investors need to actively monitor the financials and business prospects of the companies within their portfolios, certain companies definitely require much less monitoring than others due to their inherent stable nature. These are the types of companies that allow investors to sleep peacefully at night.
Here are three companies that fit the above criteria and allow investors to have an almost worry-free experience when reviewing their portfolios.
1. Riverstone Holdings Limited
Riverstone Holdings Limited (SGX: AP4) is a manufacturer of nitrile and natural rubber gloves for the cleanroom environments serving the electronics and semiconductor industries. The group also produces premium nitrile gloves for the healthcare industry. Riverstone employs more than 3,000 people in its six manufacturing facilities and can produce a total of 9 billion gloves per year as of 31 December 2018.
With healthcare glove demand forecast to grow at a low to mid-single-digit rate into the foreseeable future, Riverstone is assured of having consistently growing demand for its products. The group is one of several top manufacturers of nitrile gloves serving the healthcare industry, and its strong position will ensure continued business even as it ramps up its production with the completion of its new plant by Q1 2020, boosting production capacity to 10.4 billion gloves per year.
2. Sheng Siong Group Ltd
Sheng Siong Group Ltd (SGX: OV8) is one of the largest supermarket chains in Singapore. The group has 57 outlets across the island primarily located in the heartland of Singapore. The stores offer a good mix of fresh food and dry goods as well as general merchandise and household items.
Sheng Siong is now a familiar name in Singapore and the go-to place for many people for their daily necessities. As the group’s stores are mostly located in the heartland areas near HDB estates, it should see consistent demand from HDB dwellers who are attracted to its wide assortment of products and competitive prices. The business is unlikely to suffer even during an economic downturn, as it sells fresh food and necessities that people do not cut down on even during a recession.
3. Singapore Exchange Limited
Singapore Exchange Limited (SGX: S68), or SGX, is Singapore’s sole stock exchange. In recent years, the group has morphed into a multiasset exchange where investors and traders can buy and sell a variety of securities such as equities, fixed income, and derivatives.
SGX, being the only stock exchange in Singapore, has a strong economic moat as the regulator is extremely unlikely to allow for a second stock exchange to be set up (due also to Singapore’s small size). In addition, SGX is staffed by a competent and forward-looking management team that’s driving the business forward by increasing the bourse’s breadth and depth of product offerings. Investors can rest well knowing that the group is growing slowly but steadily, has no debt, and is also paying an annual dividend of S$0.30 (for a 3.6% dividend yield).
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 Riverstone Holdings Limited, Sheng Siong Group Ltd, and Singapore Exchange Limited. Motley Fool Singapore contributor Royston Yang owns shares in Singapore Exchange Limited.