3 Things Investors Should Know About Venture Corporation Ltd’s Business
Venture Corporation Ltd (SGX: V03) is an electronics manufacturing services provider. It has its fingers in a range of activities, such as printing & imaging; networking & communications; retail store solutions, and more.
At its current price, it has a trailing dividend yield of 4.3%. That’s not too shabby, especially when considering that the market has a yield of around 3.0% at the moment. Current and prospective investors in Venture may want to know the following three things about it:
1. Historical financial performance
An important aspect about a company to study before an investment decision can be made is the company’s historical business performance.
For Venture, its revenue has gone through a roller coaster ride over the past decade. In that period, its top-line peaked at S$3.87 billion in 2007 before declining to a low of S$2.33 billion in 2013. In 2016, the company’s revenue has partially recovered to S$2.87 billion.
Venture’s profits have also tracked a similar path as the company’s revenue since 2006. Although there’s been some ups-and-downs in the company’s bottom-line, it should be noted that the company has remained solidly profitable.
2. Dividend history
Venture has consistently paid an annual dividend in the last 10 years. Since 2006, the company’s dividend per share (excluding special dividends) has risen from S$0.25 to S$0.50 in 2016.
There’s no guarantee that history will repeat, but looking back at the past helps form a basis for future expectations. In Venture’s case, the company’s long track record of paying a dividend increases the odds that it can continue to do so in the years ahead.
3. Alignment of interests between management and shareholders
Wong Ngit Liong, Venture’s chairman and chief executive officer, holds 6.89% of the company’s shares (as of 7 March 2017). At the current market price, this stake is worth S$223 million. Wong’s remuneration package in 2016 was S$5.5 million, which is small compared to his holdings in Venture.
With these numbers, I think it’s fair to say that Wong’s financial interests are likely to be closely aligned with Venture’s shareholders.
