Singapore Post Limited (SGX: S08), commonly abbreviated as SingPost, is an associate company of Singapore Telecommunications Limited and Singapore’s designated Public Postal Licensee which provides domestic and international postal services.
It also provides logistics services in the domestic market and global delivery services. SingPost also offers products and services including postal, agency and financial services through its post offices, Self-service Automated Machines (SAMs) and vPOST, its internet portal. Its headquarters is located in Geylang, Singapore.
Today, Singapore has 62 post offices, 299 Self-service Automated Machines (SAMs) and SAMPLUS, around 40 postal agencies and more than 800 licensed stamp vendors. There are also 8,907 posting boxes are installed at various locations throughout the island. See Link
Historically, SingPost offers a decent yield at 4.61% (currently), with a historical average dividend yield of 3.87% (since Sep 2014). There may even be a potential capital upside if there is a mean reversion in the dividend yield.
As shown below, SingPost demonstrates stable annual financial performance, with DPS of SGD0.07 per share for the latest financial year ending 31 March 2016.
Should there be a mean reversion in dividend yield from 4.61% to 3.87%, there may be potential upside from its current price of SGD1.52 to a trading price range of between SGD1.61 and SGD1.89. At current yield or higher required yield of 5.28% (i.e highest yield since Sep 2014), we may potentially see a trading price range of between SGD1.18 and SGD1.59.
The above analysis is a brief high-level desktop analysis and this does not substitute the need for a detailed fundamental analysis of the Company. The working / computation shown above is strictly for illustrative purposes.
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