Why CapitaLand India Trust (SGX:CY6U) Looks Like A Quality Company

Simply Wall St.2023-10-27

One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. ...

Source Link

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2378816795?lang=en_US&edition=fundamental","thumbnail":"https://images.simplywall.st/asset/industry/9612014-choice1-main-header/1585186829376","is_english":true,"pubTime":"2023-10-27 08:33","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2378816795","market":"sg","top_or_hot":-1,"title":"Why CapitaLand India Trust (SGX:CY6U) Looks Like A Quality Company","media":"Simply Wall St.","content":"<div>\n<p>One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. ...</p>\n\n<a href=\"https://simplywall.st/stocks/sg/real-estate-management-and-development/sgx-cy6u/capitaland-india-trust-shares/news/why-capitaland-india-trust-sgxcy6u-looks-like-a-quality-comp\">Source Link</a>\n\n</div>\n","source":"simplywall_highlight","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Why CapitaLand India Trust (SGX:CY6U) Looks Like A Quality Company</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nWhy CapitaLand India Trust (SGX:CY6U) Looks Like A Quality Company\n</h2>\n\n<h4 class=\"meta\">\n\n\n2023-10-27 08:33 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://simplywall.st/stocks/sg/real-estate-management-and-development/sgx-cy6u/capitaland-india-trust-shares/news/why-capitaland-india-trust-sgxcy6u-looks-like-a-quality-comp><strong>Simply Wall St.</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business. ...</p>\n\n<a href=\"https://simplywall.st/stocks/sg/real-estate-management-and-development/sgx-cy6u/capitaland-india-trust-shares/news/why-capitaland-india-trust-sgxcy6u-looks-like-a-quality-comp\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK6139","symbol_name":"房地产运营公司","start_time":0,"source_url":"https://simplywall.st/stocks/sg/real-estate-management-and-development/sgx-cy6u/capitaland-india-trust-shares/news/why-capitaland-india-trust-sgxcy6u-looks-like-a-quality-comp","article_id":"2378816795","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/9612014-choice1-main-header/1585186829376"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2378816795","pubTimestamp":1698366812,"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK6139":"房地产运营公司","ROE":"ASTORIA US QUALITY KINGS ETF","SG9999007892.SGD":"PHILLIP SINGAPORE REAL ESTATE INCOME FUND \"A\" (SGD) INC","SG9999007918.USD":"PHILLIP SINGAPORE REAL ESTATE INCOME FUND \"A\" (USDHDG) INC","BK6512":"房地产股","LU1166156734.SGD":"Fidelity Asian Smaller Companies A-ACC-SGD","BK6110":"房地产经营公司","CY6U.SI":"凯德印度信托"},"translate_title":"凯德置地印度信托（SGX：CY6U）为何看起来像一家优质公司","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"CY6U.SI":1,"ROE":1},"content_text":"One of the best investments we can make is in our own knowledge and skill set. With that in mind, this article will work through how we can use Return On Equity (ROE) to better understand a business.  By way of learning-by-doing, we'll look at ROE to gain a better understanding of CapitaLand India Trust (SGX:CY6U).  ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders.  Put another way, it reveals the company's success at turning shareholder investments into profits.  View our latest analysis for CapitaLand India Trust  How Do You Calculate Return On Equity?  The formula for ROE is:  Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for CapitaLand India Trust is:8.9% = S$123m ÷ S$1.4b (Based on the trailing twelve months to June 2023). The 'return' is the yearly profit.  So, this means that for every SGD1 of its shareholder's investments, the company generates a profit of SGD0.09.   Does CapitaLand India Trust Have A Good ROE?  By comparing a company's ROE with its industry average, we can get a quick measure of how good it is.  The limitation of this approach is that some companies are quite different from others, even within the same industry classification.   As you can see in the graphic below, CapitaLand India Trust has a higher ROE than the average (4.2%) in the Real Estate industry. SGX:CY6U Return on Equity October 27th 2023 That's what we like to see.    However, bear in mind that a high ROE doesn’t necessarily indicate efficient profit generation.  Especially when a firm uses high levels of debt to finance its debt which may boost its ROE but the high leverage puts the company at risk.    Our risks dashboardshould have the 5 risks we have identified for CapitaLand India Trust.    How Does Debt Impact ROE?  Most companies need money -- from somewhere -- to grow their profits.  The cash for investment can come from prior year profits (retained earnings), issuing new shares, or borrowing.  In the first two cases, the ROE will capture this use of capital to grow.  In the latter case, the debt required for growth will boost returns, but will not impact the shareholders' equity.  In this manner the use of debt will boost ROE, even though the core economics of the business stay the same.  CapitaLand India Trust's Debt And Its 8.9% ROE  CapitaLand India Trust clearly uses a high amount of debt to boost returns, as it has a debt to equity ratio of 1.04.   Its ROE is quite low, even with the use of significant debt; that's not a good result, in our opinion.   Debt does bring extra risk, so it's only really worthwhile when a company generates some decent returns from it.     Conclusion    Return on equity is one way we can compare its business quality of different companies.  In our books, the highest quality companies have high return on equity, despite low debt.  If two companies have the same ROE, then I would generally prefer the one with less debt.  But ROE is just one piece of a bigger puzzle, since high quality businesses often trade on high multiples of earnings.  The rate at which profits are likely to grow, relative to the expectations of profit growth reflected in the current price, must be considered, too.   So I think it may be worth checking this free report on analyst forecasts for the company.  But note: CapitaLand India Trust may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt. Valuation is complex, but we're helping make it simple.Find out whether CapitaLand India Trust is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.View the Free AnalysisHave feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":1,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2378816795"}