ComfortDelGro Corporation (SGX: C52), or CDG, has a long and interesting history.
The land transport giant was formed back in 2003 with the merger of Comfort and DelGro by way of a scheme of arrangement.
This scheme was approved by the High Court of Singapore on 21 March 2003, and shares of CDG were listed on 31 March of the same year.
Assuming you had bought 1,000 shares of CDG on the first trading day of the newly-merged company, here’s what you will end up with.
A decent total return
A 1,000-share investment in CDG back then would have cost around S$790 (excluding brokerage fees) as shares of the group closed at S$0.79 on the day of listing.
Fast forward 22 years, and shares of CDG closed at S$1.43 on 2 July 2025, meaning your shares will be worth S$1,430.
The land transport giant provided a lacklustre compound annual growth rate (CAGR) of just 2.7% over this period, barely enough to beat inflation.
But hold on – we will be remiss if we do not include all the dividends you would have received over the years.
From 2003 to 2024, CDG paid out a total dividend of S$1.6753 per share, so your 1,000 shares would have given you S$1,675.30 of dividends.
If you add this to the value of your shares, it will come up to S$3,105.30, giving you a decent total return CAGR of 6.4%.
The surprise here is that capital gains would have netted you just S$640 (i.e. S$1,430 minus S$790), but your total dividends will be 2.5 times this capital gain.
This simple exercise shows the power of dividends in boosting your total return.
But you may be wondering – what’s next for CDG? Can it continue to deliver healthy capital gains and increasing dividends?
Improving financials
CDG reported improving financials for 2024 as the effects of COVID-19 slowly wear off.
Revenue rose 15.4% year on year to S$4.5 billion while net profit increased by 16.6% year on year to S$210.5 million.
When compared with 2003’s results, revenue increased by 142.5% from S$1.8 billion, but net profit increased by a lower 57.2% from S$133.9 million.
This smaller increase in net profit could be the reason for the share price underperformance over these years.
When the annual return is computed, this works out to a 21-year CAGR of 4.3% for CDG’s revenue from 2003 to 2024, while net profit improved by just a 2.2% CAGR.
There is a silver lining, though.
For its first quarter of 2025 (1Q 2025) business update, CDG saw revenue rise 16.4% year on year to S$1.17 billion, arising from contributions from recent acquisitions of A2B and Addison Lee.
Net profit climbed 19% year on year to S$48.3 million.
Acquisitive growth
CDG is relying on more acquisitive growth in recent years to power its top and bottom lines.
The group announced the acquisition of the Addison Lee group in October last year, adding a premium private hire, courier, and black taxi provider in London.
Back in December 2023, CDG purchased A2B, a leading Australian transportation provider with more than 8,00 vehicles in its network.
And in February 2024, CDG acquired CMAC Group, a UK ground transportation management specialist, for around S$135.4 million.
Not forgetting its home market of Singapore, CDG also topped up another 10% stake in Ming Chuan Transportation in March 2023, making it a wholly-owned subsidiary.
Ming Chuan is one of the largest wheelchair transport service providers in Singapore.
Expanding globally
It’s clear from these recent acquisitions that CDG is broadening its reach overseas as growth in Singapore becomes increasingly difficult.
For 1Q 2025, overseas revenue made up 52.6% of CDG’s total group revenue, up sharply from just 43.3% in the prior year.
Management announced several business developments that further highlight the group’s overseas growth ambitions.
CDG commenced a two-year pilot programme to deploy commercial robotaxi services in Guangzhou, China, back in March this year.
The group also formed a consortium with RATP to bid for the upcoming Copenhagen metro system tender.
Intensifying competition
Back home, CDG is facing intensifying competition from other ride-hailing companies such as Grab Holdings (NASDAQ: GRAB).
Grab recently obtained approval to start a new taxi fleet from the Land Transport Authority, which issued a street hail operator licence to the superapp.
The licence is valid for 10 years and will intensify competition in an already crowded taxi market.
Get Smart: Returns to improve over time?
CDG seems to be on the right track.
The group is reducing its reliance on Singapore and expanding its presence globally through business initiatives and acquisitions.
Already, revenue from outside of Singapore made up more than half of the group’s revenue for 1Q 2025.
Of course, investors will need to watch for the group’s operating and net profit to see if these acquisitions deliver healthy returns over time.
If they do, CDG could deliver improved capital returns and dividends to shareholders in the future.
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Disclosure: Royston Yang does not own shares in any of the companies mentioned.
