What would the world be without engineers? Modern societies have been built with architects and engineers working hand in hand to design gleaming, towering skyscrapers and efficient subways. Engineering companies are responsible for advancing society by constructing buildings, highways, roads, and other essential infrastructure.
Investors may assume engineering companies are engaged in businesses that are technical and difficult to understand. To some extent, they’re right. However, I assess such companies by looking at both their track records and meaningful contributions to the sectors in which they are strong, as well as looking at their historical financials and margins in order to make my investment decision.
Here are three engineering companies investors should consider for their portfolios.
1. Boustead Singapore Limited
Boustead Singapore Limited (SGX: F9D) is a progressive global infrastructure-related engineering and technology group. The group has four key divisions: energy-related engineering, real estate solutions, geo-spatial technology, and healthcare technology. BSL has a vast network stretching across five continents and has undertaken infrastructure-related projects in 87 countries and territories globally.
In BSL’s Q1 2020 earnings announcement (for the period ended 30 June 2019), revenue jumped 45% year on year to S$129.2 million, while adjusted net profit rose 25% year on year to S$5.9 million. The group’s energy-related engineering division has just made a strong recovery by posting a profit before tax, while the group’s order book backlog has risen to S$725 million, one of the highest levels in the group’s history.
2. Singapore Technologies Engineering Ltd
Singapore Technologies Engineering Ltd (SGX: S63) is a global defence and engineering group specialising in four key sectors: aerospace, electronics, land systems, and marine. The group employs around 22,000 people and serves customers in more than 100 countries.
For H1 2019, STE reported 6% year-on-year revenue growth to S$3.5 billion. Profit attributable to shareholders jumped by 14% year on year to S$269.3 million. It also declared an interim dividend of S$0.05 per share, unchanged from the same period last year.
3. CSE Global Ltd
CSE Global Ltd (SGX: 544) is a global technologies company with an international presence. The group has 1,000 employees worldwide and operates a network of 39 offices around the globe. CSE Global offers cost-effective, integrated solutions to industries in the oil and gas, infrastructure, and mining sectors.
For H1 2019, CSE’s revenue inched up 0.5% year on year to S$185.3 million, while profit after tax and non-controlling interests increased by 1.9% year on year to S$10.2 million. It declared an interim dividend of 1.25 Singapore cents, similar to last year’s. The good news is that new orders received by the group jumped by 22.6% year on year to S$193.9 million, so this may be a signal for better top-line growth to come.
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The information provided is for general information purposes only and is not intended to be personalized investment or financial advice. The Motley Fool Singapore has recommended shares of Boustead Singapore Limited. Motley Fool Singapore contributor Royston Yang owns shares in Boustead Singapore Limited.
Motley Fool Singapore 2019