Analysts are now making substantial upgrades to this year’s statutory forecast on Sembcorp Industries Ltd. Most have increased their revenue numbers with the view that the company will make more sales than previously expected. So if you have invested with Sembcorp, this must be good news for you.
Sembcorp’s statutory earnings per share are presumed to increase by 61% to S$0.24, while previously, it had some earnings per share of S$0.22 in 2022. The forecast now seems more positive with the solid increase in revenue and a modest increase in the earnings per share estimates.
About Sembcorp
Formerly known as Minaret Limited, Sembcorp Industries Ltd is an investment holding company founded in July 1998, with Temasek Holdings being the largest shareholder with 50% ownership. The company is involved in the following four segments: integrated urban solutions, renewables, conventional energy, and other ventures, including offshore platforms for oils extraction in Singapore. The company is also involved in the Middle East, Southeast Asia, India, China, and the United Kingdom.
Its renewable segment provides electricity from wind and solar resources and other energy storage solutions. It is also involved in system services that support the integration of renewable resources in the grid and trade in energy attribute certificates. The renewable segment also includes the development and provision of installation, maintenance, and operation of wind, solar, and other energy storage assets.
Sembcorp’s Integrated Urban Solutions segment develops large-scale townships such as businesses, industrial parks, and commercial and residential spaces, not forgetting reclamation and industrial water waste treatment production. The segment is also involved in waste to resource solutions and solid waste management.
On the other hand, the conventional Energy segment deals with energy sources such aselectricity, natural gas, and steam, and It also sells water products. Sembcorp is also involved in the storage of chemicals and petroleum products.
Other utility services that Sembcorp offers include:
- Public Cleaning
- Solid waste management
- Recycling services
- Engineering and construction related services
SembCorp Industries Share Price
- SGD 2.860 +0.020 / +0.70%
- Share Price as of: 2022-04-12 17:16
- Market Cap: S$5.1b
- 52 Week Range: 1.750 – 2.790
- Sector / Industry Group / Industry: Industrials / Capital Goods / Industrial Conglomerates
Here is a history of Sembcorp’s share price history.
The graph information comes from SGinvestors.io on Apr 27, 2022.
Over the past five years, Sembcorp prices have been on the decline. Since the beginning of 2018, its prices dropped from S$3.47 to s$2.29 before the end of 2019, and all this was before the onset of the COVID-19 pandemic.
During the pandemic, its share price dipped lower to S$1.47 by 2020. Sembcorps saw its lowest share price in September 2020 at S$1.28. Its shares price has made a relative recovery to S$2.86 as of this writing.
Shareholders take the drop in shares as an opportunity to buy more shares at a discount even if no one wants to see their holdings decrease in price. The shares bought could generate significant returns in the future.
Dividend
Here is a summary of Sembcorp’s Dividend payout over the years.
| 2021 | 2020 | 2019 | 2018 | 2017 | |
| Gross dividends (cents per share) | 6 | 3 | 4 | 4 | 7 |
| Yield | 3.16% | 1.58% | 2.11% | 2.11% | 3.68% |
In the 2010s, Sembcorp could give 22 cents per share, thus achieving a dividend rate of 11.58%. However, the share has subdued over time, managing an average of 2.53% or 4.8 cents per share.
Between 2018and 2020, Sembcorp’s dividend payout struggled a lot, reflecting the struggling share prices during the period.
Sembcorp is not performing as well as before, but it is back as one of the top blue-chip stocks in Singapore in terms of dividend rankings.
Find out more about the best paying dividend stocks in Singapore.
What Do Analysts Say?
The rise of crude oil positively impacts Sembcorp’s energy segment. For its gas prices, its average selling price is attached to the high Sulphur fuel and on a cost passed through method. SembCorp hedges a portion of its fuel costs a year ahead.
Sembcorp benefits from the blended fuel mix optimization compared to its peers since it is a piped natural gas importer and supplier.
On the other hand, Sembcorp India has a long-term purchase power agreement supported by the local coal that runs through a cost passed-through model. The remaining coal is priced on the Indian Energy Exchange or the spot market, and the price has risen by 47% since December 2021, mitigating the rising imported coal costs.
Analysts say that the tightness seen in the energy market will positively impact Sembcorp’s stock quotes, thus high energy conventional profits.
Is Sembcorp Industries Ltd a Good Stock to Buy?
SembCorp is the leading urban solutions and energy provider with a market cap of $3.8 billion, a 52 Week Range of 1.750 – 2.790, and has operations in different counties in Asia. It is an excellent stock to buy, even if it exists in a highly volatile industry.
With the recent increase in prices in the energy industry, analysts forecast that Sembcorp shares will increase with time.
See also: Capitaland Integrated Commercial Trust, Genting Singapore, UMS Holding Limited
Related Questions
What Does the Future Look Like for Sembcorp Industries Ltd?
Sembcorp has been declining for the past five years, but there is hope. The company has recorded an impressive growth earning of over 500% during the past year. This positive trend is expected to grow by 25% every year.
Sembcorp Industries Ltd has further made considerable strides in sustainability and climate change with reports that its new sustainable portfolio is expected to make a 70% profit by 2025.
Closing
Sembcorp exists in one of the most volatile industries, and it’s not likely to go anywhere in a long time since it provides the most critical services for the people of Singapore. The company’s net profit has improved since the pandemic hence the slight increase in the share prices. Sembcorp continues to grow its clean energy portfolio, but its traditional energy portfolio makes the most profits.
Key Takeaways
- Sembcorp Industries Ltd is listed on the SGX and the SGX.
- Sembcorp Industries Ltd is also a component of the Straits Times Index.
- The company issues out its dividend payouts twice a year.
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