Yahoo Finance Want To Invest In Singapore Airlines Limited (SGX:C6L)? Here’s How It Performed Lately
For investors with a long-term horizon, examining earnings trend over time and against industry peers is more insightful than looking at an earnings announcement in one point in time. Investors may find my commentary, albeit very high-level and brief, on Singapore Airlines Limited (SGX:C6L) useful as an attempt to give more color around how Singapore Airlines is currently performing. See our latest analysis for Singapore Airlines
How Did C6L’s Recent Performance Stack Up Against Its Past?
C6L’s trailing twelve-month earnings (from 31 March 2018) of S$892.90m has more than doubled from S$360.40m in the prior year. Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 5.61%, indicating the rate at which C6L is growing has accelerated. What’s enabled this growth? Let’s take a look at whether it is only because of an industry uplift, or if Singapore Airlines has experienced some company-specific growth.
Over the last few years, Singapore Airlines grew its bottom line faster than revenue by effectively controlling its costs. This brought about a margin expansion and profitability over time. Eyeballing growth from a sector-level, the SG airlines industry has been growing its average earnings by double-digit 43.75% over the past year, and a less exciting 7.01% over the past five years. This means that whatever uplift the industry is gaining from, Singapore Airlines is capable of leveraging this to its advantage.
In terms of returns from investment, Singapore Airlines has not invested its equity funds well, leading to a 6.41% return on equity (ROE), below the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 3.32% is below the SG Airlines industry of 3.53%, indicating Singapore Airlines’s are utilized less efficiently. However, its return on capital (ROC), which also accounts for Singapore Airlines’s debt level, has increased over the past 3 years from 2.16% to 5.22%.
What does this mean?
Though Singapore Airlines’s past data is helpful, it is only one aspect of my investment thesis. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I suggest you continue to research Singapore Airlines to get a better picture of the stock by looking at:
Future Outlook: What are well-informed industry analysts predicting for C6L’s future growth? Take a look at our free research report of analyst consensus for C6L’s outlook.
Financial Health: Is C6L’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 31 March 2018. This may not be consistent with full year annual report figures.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
