Indeed, locally, there are opportunities. The company’s taxi business (while down year-on-year) could see better monetisation going forward.
That’s down to management’s observation that its taxi drivers in Singapore are witnessing higher bookings versus pre-Covid levels.
With a lower commission rate (currently 4%) for drivers when compared to Go-Jek (10%) and Grab (20%), ComfortDelGro has room to raise its rate in the second half of this year.
Dividend reward for shareholders
For ComfortDelGro’s interim dividend, the company announced a dividend per share (DPS) of 2.85 Singapore cents. That was up 35.7% year-on-year.
In addition, the company also announced a special dividend of 1.41 Singapore cents per share. This was in relation to 100% of its exceptional gain on a disposal of Alperton – a London property it owned.
Based on its latest share price of S$1.49 (and excluding the special dividend), ComfortDelGro shares are currently offering investors a 12-month forward dividend yield of 3.8%.
Given ComfortDelGro’s latest earnings, the company seems to be on the right track. However, for dividend investors, it’s worth watching its dividend payout ratio.
Management maintained its commitment to its dividend policy. This policy aims to pay out at least 50% of PATMI.
With the latest interim DPS making up 70% of H1 2022 PATMI, it’s a trend investors should monitor.
Overall, ComfortDelgro appears to be a strong candidate for a “reopening play” in the Singapore market. Beyond that, though, there are still questions to be answered over the consistency of its dividend payout.
Disclaimer: ProsperUs Head of Content & Investment Lead Tim Phillips doesn’t own shares of any companies mentioned.
Tim, based in Singapore but from Hong Kong, caught the investing bug as a teenager and is a passionate advocate of responsible long-term investing as a great way to build wealth.
He has worked in various content roles at Schroders and the Motley Fool, with a focus on Asian stocks, but believes in buying great businesses – wherever they may be. He is also a certified SGX Academy Trainer.
In his spare time, Tim enjoys running after his two young sons, playing football and practicing yoga.