When it comes to investing, working hard is not enough, you need to work smart.
Smart investing not just in identifying great businesses, but also in having the right temperament to ensure long-term success in growing your wealth.
As the stock market goes through a major upheaval due to COVID-19, your job as an investor just got much tougher.
It’s not easy to sift through the battered landscape to identify the gems.
Especially when most businesses would have been badly impacted by the adverse effects of this crisis.
Still, this crisis should be looked at in context.
There have been numerous crises over the past few decades that have roiled stock markets and impacted businesses.
However, great companies continue to soldier on and achieve positive outcomes through adversity.
Over at the Smart Investor, we look for companies that display resilience, a proven business model, growth prospects and, preferably, a penchant for paying out steady dividends.
Here are three companies that fit the bill.
Singapore Exchange Limited (SGX: S68)
Singapore Exchange Limited, or SGX, is Singapore’s sole stock exchange operator.
The group operates a platform for the buying and selling of a wide variety of securities, including equities, fixed income and derivatives.
SGX reported a stellar set of earnings for its fiscal year ended 30 June 2020.
Revenue increased by 16% year on year, surpassing the S$1 billion mark.
Net profit after tax jumped by 21% year on year to S$472 million.
SGX saw growth in all its divisions, buoyed by higher trading volumes from increased account openings and boosted up by increased participation from market participants using its suite of derivatives for both hedging and portfolio management.
The bourse operator declared a final quarterly dividend of S$0.08 per share, and its forward annual dividend will be S$0.32 for the fiscal year 2021.
At the last traded price of S$8.71, this translates to a forward dividend yield of around 3.7%.
SGX has plans for further growth as it announced the signing of a long-term strategic partnership agreement with FTSE Russell, a global index and data provider.
Both parties will work on developing innovative Asian multi-asset solutions.
This collaboration will allow SGX to develop core products that are anchored around FTSE Russell’s global benchmark indices for fixed income, listed real estate, global equities and currencies.
The move is set to broaden SGX’s suite of offerings and can attract a larger pool of potential clients to trade more through SGX’s platform.
Sheng Siong Group Ltd (SGX: OV8)
Sheng Siong is among the largest supermarket chains operators in Singapore.
The group has 61 outlets located across the island, and sells a variety of both live produce and general merchandise, offering over 1,200 products under its 18 house brands.
For the first half of 2020, Sheng Siong reported a strong set of earnings.
Revenue soared by 52.7% year on year to S$747.4 million, while net profit doubled to S$75.2 million.
The group witnessed a boom in its business as the circuit breaker measures and work from home practice pushed households to spend more on groceries and necessities.
The interim dividend was doubled from S$0.0175 a year ago to S$0.035.
For the second quarter of 2020, revenue grew by 75.8% year on year, of which 61.2% was contributed by higher same-store sales.
The gross profit margin for the group also hit a two-year high at 28.1%.
Sheng Siong’s planned expansion continues with the opening of three new stores.
These additions will add on a combined 18,940 square feet and increase the group’s total store count to 64.
iFAST Corporation Limited (SGX: AIY)
iFAST is a financial technology company that operates a platform for the buying and selling of unit trusts, equities and bonds.
The group manages assets under administration (AUA) of S$11.15 billion as of 30 June 2020 and is present in Singapore, Malaysia, Hong Kong, China and India.
For the first half of this year, iFAST reported a 33% year on year jump in revenue to S$77 million.
Operating profit soared by 96% year on year and net profit doubled from S$4.1 million to S$8.2 million.
The group declared an interim dividend of S$0.0075, unchanged from a year ago.
The increased pace of digitalisation has led to rising business volumes for the group, while more investors have opened new accounts to invest in stocks and bonds.
iFAST is hopeful that it can clinch the Singapore digital bank wholesale licence as it partners with Yillion Group and Hande Group.
The group recently announced that it had obtained approval-in-principle to deal with securities in Malaysia.
This paves the way for iFAST to launch stock dealing services for Malaysian stocks by early 2021.
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Disclaimer: Royston Yang owns shares Singapore Exchange Limited and iFAST Corporation Limited.