What do the two companies above have in common?
1. Both are local companies started from scratch.
2. Both are listed in the Singapore Exchange.
3. Both do not have high trading volume.
4. Both companies give dividend yield rate of about 8% or more.
5. Both are cheap companies.
6. Both have the biggest shareholder holding about 53% of total shares.
So what am I talking about?
I am talking about companies that can help you grow your savings.
Let's just talk about dividend yield.
Popular holdings gave out dividend of 1.2 cents per share for financial year ended 30 April 2010.
Current price of Popular Holdings is 15 cents.
This gives us a yield of 8%. (take dividend divided by share price times 100%)
Sim Lian Holdings gave out dividend of 5.1 cents per share for financial year ended 30 June 2010.
Current price of Sim Lian Group is 52 cents.
This gives us a yield of 9.8%.
Let's talk about their P/E ratio.
Popular Holdings earns 4.53 cents for financial year ended 30 April 2010. The P/E ratio is at only 3.31.
Thier net asset value (NAV) is already 21.45 cents. It means that we can buy Popular Holdings at a discount of 6.45 cents (30% discount).
Sim Lian Group earns 18.4 cents for financial year ended 30 June 2010. The P/E ratio is at only 2.83.
Their net asset value (NAV) is already 55 cents. It means that we can buy Sim Lian at a discount of 3 cents (5.5% discount)
Both companies have the largest shareholder holding about 53% of the total share available, which means small investors like us got no say in their proposal. But who cares? As long as these companies are well run and give us earnings every year, I don't see anything wrong with them holding more than 50% of the total shares.
If you got the time, go to their company websites and read their annual reports. Do some homework before you commit to invest in these two companies.
Sim Lian Group: http://www.simlian.com.sg/
Popular Holdings: http://www.popularworld.com/
Disclosure: Blogger holds shares of Popular Holdings. Blogger has no shares in Sim Lian Group.
Disclaimer: This post is written based on my own findings and views. It is not meant to be a blog to encourage buy or sell.
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