10 Simple Numbers That Help Investors Understand Singapore Telecommunications Limited
The company is currently under spotlight due to the initial public offering (IPO) of its associate, NetLink NBN Trust.
In this article, however, our focus is on the parent rather than its associate. What we will do here is to look at 10 simple numbers to help investors have a quick overview of the company.
With that, let’s look at the numbers.
10 years revenue growth rate:
According to Morningstar.com, SingTel’s revenue in FY08 was S$14.84 billion whilst revenue in FY17 was S$16.71 million. In other words, the annual growth rate was 1.33% during the period.
10 years net profit growth rate:
Again, we refer to Morningstar.com for the net profit numbers of SingTel. In FY08, net profit was S$3.96 billion whilst net profit in FY17 was S$3.85 billion. This translates into a compounded annual growth rate of negative 0.31%.
One of the important metrics to observe for telcos is the number of customers it has. Here, Singtel “reaches” out to 638 million customers around the world, including its associates. The emphasis on the word “reaches” since SingTel does not own all of these customers since many of these customers “belong” to Singtel’s associates.
SingTel’s EBIDTA margin for the latest Financial Year was 29.9%. In comparison, Starhub and M1 reported EBIDTA margins of 29.0% and 29.4%, respectively.
Return on equity (ROE):
According to Google Finance, SingTel’s ROE based on its latest annual earnings was at 14.5%. Comparatively, Starhub and M1 reported ROE of 178.5% and 36.7%, respectively, in their latest annual earnings.
SingTel’s total debt to equity ratio is 39.7%. This is a rather healthy level of gearing, thus, allowing the company to further raise debts if necessary for future expansion.
Dividend track record:
SingTel has consistently paid out dividends for more than 10 years. The company’s current policy is to pay out 60-75% of net profit as dividends.
Price to earnings (P/E) ratio:
At a current price of S$3.90, SingTel has a P/E ratio of 16.4 times. This is higher than the market average, as seen from the P/E ratio of STI ETF (SGX: ES3), which is at 13.4.
Price to book (P/B) ratio:
At current price of S$3.90, SingTel has a price to book ratio of 2.3 times. This is higher than STI ETF’s P/B ratio of 1.2 times.
Five years’ share price performance:
In the last five years, SingTel’s share price is up by about 13%, from about S$3.44 to S$3.90 today.
The above 10 numbers should give investor a quick summary of the company.
With that, investors can take the next step of carrying up detailed research on the company to better understand to overall attractiveness of the healthcare provider as a long term investment.