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In my blog detailing changes made to my investment portfolio in January 2023, I said that I increased my exposure to ComfortDelgro.
In that blog, I said that ComfortDelgro's fundamentals looked to be stabilizing and, technically, it looked like ComfortDelgro's stock price was bottoming too.
If you missed that blog or need a refresher, see:
Changes to portfolio in Jan 23.
ComfortDelgro has just reported an increase of 63% in 2H earnings, year on year.
Operating costs for the full year increased 6.3% while operating profit increased 35.1% which is pretty impressive, given the many challenges ComfortDelgro is facing.
Higher dividend income from ComfortDelgro is going to be pretty impactful as it is still one of my largest investments.
ComfortDelgro has declared a final dividend of 1.76c per share and a special dividend of 2.46c per share.
ComfortDelgro has a huge cash pile and, if they do not have better use for the money, paying more generous dividends to shareholders cannot be a bad idea.
Technically, ComfortDelgro is now testing immediate resistance at $1.20 which is provided by a declining 50 days moving average.
If this resistance should be broken, there is a chance that the declining 200 days exponential moving average which is currently at $1.30 could be tested next.
There are multiple resistance levels and although analysts covering ComfortDelgro seem to believe that the worst is over with most having mouth watering target prices for ComfortDelgro's common stock, it could take quite a while before we see those levels.
That is from a technical analysis perspective, of course.
Fundamentally, ComfortDelgro should see a gradual improvement in earnings as we continue to see a return to pre COVID-19 pandemic norms.
So, from this perspective, to expect a mean reversion to happen sometime in the future isn't unreasonable.
Still, we want to stay grounded in our expectations.
If we are investing for growth, at this point, it seems that ComfortDelgro is probably a poor choice but as an investment for income, ComfortDelgro is probably still able to pull its own weight in any investment portfolio.
I am not going to hold my breath if I am looking for massive capital gains here, for sure.
Instead, I will celebrate the higher than expected dividend for now.
Reference:
Add CDG or the banks?
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1 comments:
Despite a challenging year, CDG generated free cashflow of $266 million.
Net cash in FY22 increased by $97 million to $675 million.
CAPEX continues to be relatively low.
At $300 million, CAPEX was below pre-COVID 19 pandemic levels of $400 to $500 million.
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