Better Blue-Chip Stock: Keppel Ltd Vs Sembcorp Industries

The Smart Investor09-20

Blue-chip stocks are having a field day this year as the bellwether Straits Times Index hit a 17-year high recently.However, two blue-chip stocks, Keppel and SEMBCORP INDUSTRIES LTD, or SCI, ...

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1PC
·09-20
Buy All [Happy]
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BoonHuat
·09-20
Nice!
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We compare them across various financial metrics.Financial performanceFirst, let’s look at each company’s financials for the first half of 2024 (1H 2024).Keppel and SCI both saw year-on-year declines in revenue.For Keppel, both its infrastructure and real estate divisions saw revenue fall by 10% and 44% year on year, respectively.SCI saw its Gas and Related Services division post an 18% year on year fall in revenue that made up the bulk of the 12.3% year-on-year decline in group revenue.Although both companies saw their net profit fall year on year, investors should be looking at their core net profit which excludes both discontinued operations and exceptional items.If we look at core net profit, Keppel managed to post a small 6.7% year on year increase to S$513 million.Winner: KeppelFinancial strengthNext, we move on to each company’s balance sheet to explore their financial strength.In doing so, we looked at Keppel and SCI’s net debt and compared it against shareholder equity and total assets.Although Keppel had a higher overall net debt of S$10.2 billion compared with SCI’s S$7.2 billion, its net debt metrics looked healthier.Keppel’s net debt to equity (net gearing) came in just below one while its net debt to total assets stood at 0.37.These two metrics were lower than SCI which had net gearing at 1.42 times and net debt to total assets of 0.41.Winner: KeppelCash flow generationThe next metrics we look at is each company’s cash flow generation ability.For Keppel, its operating cash flow come in negative for 1H 2024.When capital expenditure (capex) is accounted for, the asset manager churned out a negative free cash flow of S$423.6 million.SCI managed to generate an operating cash inflow of S$517 million.Capex, however, came in at S$568 million and caused the utility giant to turn in a negative free cash flow of S$51 million.With both companies posting negative free cash flow, we favour the one that managed to at least generate a positive operating cash flow.Winner: SCIDividends and dividend yieldFinally, we come to the section that should interest income investors – dividends.Keppel paid out a trailing 12-month dividend of S$0.34 which gave its shares a trailing dividend yield of 5.2%.However, its interim dividend of S$0.15 remained unchanged from a year ago.SCI, on the other hand, paid out a trailing 12-month dividend of S$0.14 which gave its shares a much lower trailing dividend yield of 2.6%, half of what Keppel’s shares are sporting.However, the utility group did manage to raise its interim dividend by an impressive 20% year on year.That said, we will prefer Keppel as its dividend yield is significantly higher than SCI, and the asset manager also could raise its dividends in future even if management did not do so this round.Winner: KeppelInvestor Day round-upsOther than the above financial metrics, investors can also weigh each business based on its Investor Day targets.The 1H 2024 results serve as a convenient checkpoint to gauge each company’s progress towards attaining its goals.Keppel reported good progress towards its Vision 2030 goals with its asset management earnings more than doubling year on year to S$75 million in 1H 2024.Its funds under management also grew by 55% from the end of 2023 till 1H 2024, aided by the acquisition of Aermont Capital.Asset monetisations have also hit more than S$5.6 billion since October 2020.SCI is also making healthy progress towards its 2028 goals that it set back during last year’s Investor Day.Its renewables gross installed capacity hit 14.4 GW as of June 2024, more than halfway towards its target of 25 GW by 2028.SCI also announced a new urban strategy just last month to increase its land for development to 18,000 hectares by 2028 (current: 14,000 hectares) and achieve an industrial property gross floor area of 1.5 million square metres (current: ~130,000 square metres).Get Smart: Keppel emerges as the winnerAfter weighing the pros and cons of each company, Keppel emerges as the winner.Keppel managed to eke out a small year-on-year rise in its core net profit and is also more conservatively financed compared with SCI.Although the asset manager generated negative free cash flow, it managed to increase its funds under management and recurring income and is also making good progress on its asset monetisation efforts.Furthermore, Keppel kept its interim dividend constant and its shares provide a high dividend yield of 5.2%.","kind":null,"is_publish_news":true,"is_publish_highlight":true,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[{"id":351284068077688,"gmtCreate":1726800290014,"gmtModify":1726800293694,"author":{"id":"3574752437126777","authorId":"3574752437126777","name":"1PC","avatar":"https://community-static.tradeup.com/news/d93d931cb700e24c910644542320e877","vip":1,"crmLevel":6,"crmLevelSwitch":0,"idStr":"3574752437126777","authorIdStr":"3574752437126777"},"htmlText":"Buy All&nbsp;[Happy]&nbsp;&nbsp;","listText":"Buy All&nbsp;[Happy]&nbsp;&nbsp;","text":"Buy All [Happy]","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":1,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/351284068077688","repostId":2468637913,"repostType":2,"repost":{"id":"2468637913","pubTimestamp":1726796833,"share":"https://ttm.financial/m/news/2468637913?lang=&edition=fundamental","pubTime":"2024-09-20 09:47","market":"sg","language":"en","title":"Better Blue-Chip Stock: Keppel Ltd Vs Sembcorp Industries","url":"https://stock-news.laohu8.com/highlight/detail?id=2468637913","media":"The Smart Investor","summary":"We compare these two billion-dollar blue-chip stocks to determine which makes the better investment.","content":"<html><head></head><body><p>Blue-chip stocks are having a field day this year as the bellwether <a href=\"https://laohu8.com/S/STI.SI\">Straits Times Index</a>  hit a 17-year high recently.</p><p style=\"text-align: start;\">However, two blue-chip stocks,  <a href=\"https://laohu8.com/S/BN4.SI\">Keppel</a>  and  <a href=\"https://laohu8.com/S/U96.SI\">SEMBCORP INDUSTRIES LTD</a>, or SCI, displayed a lacklustre performance.</p><p style=\"text-align: start;\">Keppel saw its share price dip by 6.8% year-to-date (YTD) while SCI’s share price has inched up just 1.9% YTD.</p><p style=\"text-align: start;\">Both companies have detailed their long-term strategic plans in their Investor Day releases.</p><p style=\"text-align: start;\">These initiatives should provide investors with the confidence that they can do well in the future.</p><p style=\"text-align: start;\">So, which of these blue-chip stocks is a more compelling buy? We compare them across various financial metrics.</p><h2 id=\"id_3123254984\">Financial performance</h2><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/19b302a04ecf21f809fc3cc7fbbd37cb\" tg-width=\"743\" tg-height=\"296\"/></p><p>First, let’s look at each company’s financials for the first half of 2024 (1H 2024).</p><p>Keppel and SCI both saw year-on-year declines in revenue.</p><p>For Keppel, both its infrastructure and real estate divisions saw revenue fall by 10% and 44% year on year, respectively.</p><p>SCI saw its Gas and Related Services division post an 18% year on year fall in revenue that made up the bulk of the 12.3% year-on-year decline in group revenue.</p><p>Although both companies saw their net profit fall year on year, investors should be looking at their core net profit which excludes both discontinued operations and exceptional items.</p><p>If we look at core net profit, Keppel managed to post a small 6.7% year on year increase to S$513 million.</p><p><strong>Winner: Keppel</strong></p><h2 id=\"id_3707426125\">Financial strength</h2><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/a1b07982e6a0f370216acdfa1816afdd\" tg-width=\"742\" tg-height=\"297\"/></p><p>Next, we move on to each company’s balance sheet to explore their financial strength.</p><p>In doing so, we looked at Keppel and SCI’s net debt and compared it against shareholder equity and total assets.</p><p>Although Keppel had a higher overall net debt of S$10.2 billion compared with SCI’s S$7.2 billion, its net debt metrics looked healthier.</p><p>Keppel’s net debt to equity (net gearing) came in just below one while its net debt to total assets stood at 0.37.</p><p>These two metrics were lower than SCI which had net gearing at 1.42 times and net debt to total assets of 0.41.</p><p><strong>Winner: Keppel</strong></p><h2 id=\"id_3894343452\">Cash flow generation</h2><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/25ec910faba17456e5322ad8e04ed44a\" tg-width=\"742\" tg-height=\"241\"/></p><p>The next metrics we look at is each company’s cash flow generation ability.</p><p>For Keppel, its operating cash flow come in negative for 1H 2024.</p><p>When capital expenditure (capex) is accounted for, the asset manager churned out a negative free cash flow of S$423.6 million.</p><p>SCI managed to generate an operating cash inflow of S$517 million.</p><p>Capex, however, came in at S$568 million and caused the utility giant to turn in a negative free cash flow of S$51 million.</p><p>With both companies posting negative free cash flow, we favour the one that managed to at least generate a positive operating cash flow.</p><p><strong>Winner: SCI</strong></p><h2 id=\"id_2468283215\">Dividends and dividend yield</h2><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/2cd4af110466f8aa58fb45a0cda3d03a\" tg-width=\"745\" tg-height=\"387\"/></p><p>Finally, we come to the section that should interest income investors – dividends.</p><p>Keppel paid out a trailing 12-month dividend of S$0.34 which gave its shares a trailing dividend yield of 5.2%.</p><p>However, its interim dividend of S$0.15 remained unchanged from a year ago.</p><p>SCI, on the other hand, paid out a trailing 12-month dividend of S$0.14 which gave its shares a much lower trailing dividend yield of 2.6%, half of what Keppel’s shares are sporting.</p><p>However, the utility group did manage to raise its interim dividend by an impressive 20% year on year.</p><p>That said, we will prefer Keppel as its dividend yield is significantly higher than SCI, and the asset manager also could raise its dividends in future even if management did not do so this round.</p><p><strong>Winner: Keppel</strong></p><h2 id=\"id_895772828\">Investor Day round-ups</h2><p>Other than the above financial metrics, investors can also weigh each business based on its Investor Day targets.</p><p>The 1H 2024 results serve as a convenient checkpoint to gauge each company’s progress towards attaining its goals.</p><p>Keppel reported good progress towards its Vision 2030 goals with its asset management earnings more than doubling year on year to S$75 million in 1H 2024.</p><p>Its funds under management also grew by 55% from the end of 2023 till 1H 2024, aided by the acquisition of Aermont Capital.</p><p>Asset monetisations have also hit more than S$5.6 billion since October 2020.</p><p>SCI is also making healthy progress towards its 2028 goals that it set back during last year’s Investor Day.</p><p>Its renewables gross installed capacity hit 14.4 GW as of June 2024, more than halfway towards its target of 25 GW by 2028.</p><p>SCI also announced a new urban strategy just last month to increase its land for development to 18,000 hectares by 2028 (current: 14,000 hectares) and achieve an industrial property gross floor area of 1.5 million square metres (current: ~130,000 square metres).</p><h2 id=\"id_1069864755\">Get Smart: Keppel emerges as the winner</h2><p>After weighing the pros and cons of each company, Keppel emerges as the winner.</p><p>Keppel managed to eke out a small year-on-year rise in its core net profit and is also more conservatively financed compared with SCI.</p><p>Although the asset manager generated negative free cash flow, it managed to increase its funds under management and recurring income and is also making good progress on its asset monetisation efforts.</p><p>Furthermore, Keppel kept its interim dividend constant and its shares provide a high dividend yield of 5.2%.</p><p></p><p></p></body></html>","source":"thesmartinvestor_highlight","collect":0,"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 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.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\">\nBetter Blue-Chip Stock: Keppel Ltd Vs Sembcorp Industries\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-20 09:47 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://thesmartinvestor.com.sg/better-blue-chip-stock-keppel-ltd-vs-sembcorp-industries/><strong>The Smart Investor</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Blue-chip stocks are having a field day this year as the bellwether Straits Times Index  hit a 17-year high recently.However, two blue-chip stocks,  Keppel  and  SEMBCORP INDUSTRIES LTD, or SCI, ...</p>\n\n<a href=\"https://thesmartinvestor.com.sg/better-blue-chip-stock-keppel-ltd-vs-sembcorp-industries/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SG9999008742.SGD":"Eastspring Investments Unit Trusts - Singapore ASEAN Equity SGD","SG9999000343.SGD":"Schroder Singapore Trust A Dis SGD","SG9999006266.SGD":"MANULIFE SINGAPORE EQUITY \"A\" (SGD) ACC","SG9999013478.USD":"利安新加坡股息基金","SG9999013460.SGD":"LionGlobal Singapore Dividend Equity Fund SGD","SG9999005177.SGD":"Legg Mason Martin Currie - Southeast Asia Trust A Acc SGD","SG9999001135.SGD":"United ASEAN Fund SGD","SG9999001127.SGD":"United Singapore Growth Fund SGD","SG9999014302.SGD":"RHB Singapore Income Fund SGD","SG9999000475.SGD":"Aberdeen Standard Singapore Equity SGD","BK6523":"ESG概念","SG9999014492.USD":"NIKKO AM ASEAN EQUITY \"A\" (USD) ACC","BK6505":"周期性消费品与消费者服务","STI.SI":"富时新加坡海峡指数","SG9999014484.SGD":"Nikko AM ASEAN Equity Fund A SGD","SGXZ43160589.SGD":"UNITED SG DYNAMIC INCOME FUND \"A\" (SGD) ACC","IE00BYTNYN87.SGD":"PINEBRIDGE ASIA EX JAPAN SMALL CAP EQUITY \"A5\" (SGD) ACC","SGXZ24219693.SGD":"UNITED SG DYNAMIC INCOME FUND \"A\" (SGD) INC","IE00B12V2V27.USD":"柏瑞亚洲小盘股A(除日本)","U96.SI":"胜科工业","SG9999001226.SGD":"UNITED SUSTAINABLE ASIA TOP 50 \"A\" (SGD) ACC","SGXZ27511609.SGD":"NIKKO AM SINGAPORE DIVIDEND EQUITY \"SGD\" (SGD) ACC","SG9999003826.SGD":"日兴资管新加坡股息基金 SGD","SG9999016042.SGD":"Schroder Singapore Trust A Acc SGD","BK4007":"制药","BK6113":"复合型公用事业","SGXZ58947870.SGD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (SGDHDG) INC","SG9999013486.USD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (USD) INC A","SG9999011746.SGD":"PINEBRIDGE INTERNATIONAL FUNDS - ACORNS OF ASIA BA (SGD) ACC","IE00BYQNZ168.SGD":"PINEBRIDGE ASIA EX JAPAN SMALL CAP EQUITY \"A5CP\" (SGD) ACC","BN4.SI":"吉宝有限公司","SG9999004360.SGD":"Nikko AM Shenton Thrift Fund SGD","BK6500":"公用股","BK6111":"工业集团企业"},"source_url":"https://thesmartinvestor.com.sg/better-blue-chip-stock-keppel-ltd-vs-sembcorp-industries/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2468637913","content_text":"Blue-chip stocks are having a field day this year as the bellwether Straits Times Index  hit a 17-year high recently.However, two blue-chip stocks,  Keppel  and  SEMBCORP INDUSTRIES LTD, or SCI, displayed a lacklustre performance.Keppel saw its share price dip by 6.8% year-to-date (YTD) while SCI’s share price has inched up just 1.9% YTD.Both companies have detailed their long-term strategic plans in their Investor Day releases.These initiatives should provide investors with the confidence that they can do well in the future.So, which of these blue-chip stocks is a more compelling buy? We compare them across various financial metrics.Financial performanceFirst, let’s look at each company’s financials for the first half of 2024 (1H 2024).Keppel and SCI both saw year-on-year declines in revenue.For Keppel, both its infrastructure and real estate divisions saw revenue fall by 10% and 44% year on year, respectively.SCI saw its Gas and Related Services division post an 18% year on year fall in revenue that made up the bulk of the 12.3% year-on-year decline in group revenue.Although both companies saw their net profit fall year on year, investors should be looking at their core net profit which excludes both discontinued operations and exceptional items.If we look at core net profit, Keppel managed to post a small 6.7% year on year increase to S$513 million.Winner: KeppelFinancial strengthNext, we move on to each company’s balance sheet to explore their financial strength.In doing so, we looked at Keppel and SCI’s net debt and compared it against shareholder equity and total assets.Although Keppel had a higher overall net debt of S$10.2 billion compared with SCI’s S$7.2 billion, its net debt metrics looked healthier.Keppel’s net debt to equity (net gearing) came in just below one while its net debt to total assets stood at 0.37.These two metrics were lower than SCI which had net gearing at 1.42 times and net debt to total assets of 0.41.Winner: KeppelCash flow generationThe next metrics we look at is each company’s cash flow generation ability.For Keppel, its operating cash flow come in negative for 1H 2024.When capital expenditure (capex) is accounted for, the asset manager churned out a negative free cash flow of S$423.6 million.SCI managed to generate an operating cash inflow of S$517 million.Capex, however, came in at S$568 million and caused the utility giant to turn in a negative free cash flow of S$51 million.With both companies posting negative free cash flow, we favour the one that managed to at least generate a positive operating cash flow.Winner: SCIDividends and dividend yieldFinally, we come to the section that should interest income investors – dividends.Keppel paid out a trailing 12-month dividend of S$0.34 which gave its shares a trailing dividend yield of 5.2%.However, its interim dividend of S$0.15 remained unchanged from a year ago.SCI, on the other hand, paid out a trailing 12-month dividend of S$0.14 which gave its shares a much lower trailing dividend yield of 2.6%, half of what Keppel’s shares are sporting.However, the utility group did manage to raise its interim dividend by an impressive 20% year on year.That said, we will prefer Keppel as its dividend yield is significantly higher than SCI, and the asset manager also could raise its dividends in future even if management did not do so this round.Winner: KeppelInvestor Day round-upsOther than the above financial metrics, investors can also weigh each business based on its Investor Day targets.The 1H 2024 results serve as a convenient checkpoint to gauge each company’s progress towards attaining its goals.Keppel reported good progress towards its Vision 2030 goals with its asset management earnings more than doubling year on year to S$75 million in 1H 2024.Its funds under management also grew by 55% from the end of 2023 till 1H 2024, aided by the acquisition of Aermont Capital.Asset monetisations have also hit more than S$5.6 billion since October 2020.SCI is also making healthy progress towards its 2028 goals that it set back during last year’s Investor Day.Its renewables gross installed capacity hit 14.4 GW as of June 2024, more than halfway towards its target of 25 GW by 2028.SCI also announced a new urban strategy just last month to increase its land for development to 18,000 hectares by 2028 (current: 14,000 hectares) and achieve an industrial property gross floor area of 1.5 million square metres (current: ~130,000 square metres).Get Smart: Keppel emerges as the winnerAfter weighing the pros and cons of each company, Keppel emerges as the winner.Keppel managed to eke out a small year-on-year rise in its core net profit and is also more conservatively financed compared with SCI.Although the asset manager generated negative free cash flow, it managed to increase its funds under management and recurring income and is also making good progress on its asset monetisation efforts.Furthermore, Keppel kept its interim dividend constant and its shares provide a high dividend yield of 5.2%.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"},{"id":351281060986904,"gmtCreate":1726799552675,"gmtModify":1726799556089,"author":{"id":"3574549633778650","authorId":"3574549633778650","name":"BoonHuat","avatar":"https://static.tigerbbs.com/f64154b666040668c472fc3731becde7","vip":1,"crmLevel":7,"crmLevelSwitch":1,"idStr":"3574549633778650","authorIdStr":"3574549633778650"},"htmlText":"Nice!","listText":"Nice!","text":"Nice!","images":[],"top":1,"highlighted":1,"essential":1,"paper":1,"likeSize":0,"commentSize":0,"repostSize":0,"link":"https://ttm.financial/post/351281060986904","repostId":2468637913,"repostType":2,"repost":{"id":"2468637913","pubTimestamp":1726796833,"share":"https://ttm.financial/m/news/2468637913?lang=&edition=fundamental","pubTime":"2024-09-20 09:47","market":"sg","language":"en","title":"Better Blue-Chip Stock: Keppel Ltd Vs Sembcorp Industries","url":"https://stock-news.laohu8.com/highlight/detail?id=2468637913","media":"The Smart Investor","summary":"We compare these two billion-dollar blue-chip stocks to determine which makes the better investment.","content":"<html><head></head><body><p>Blue-chip stocks are having a field day this year as the bellwether <a href=\"https://laohu8.com/S/STI.SI\">Straits Times Index</a>  hit a 17-year high recently.</p><p style=\"text-align: start;\">However, two blue-chip stocks,  <a href=\"https://laohu8.com/S/BN4.SI\">Keppel</a>  and  <a href=\"https://laohu8.com/S/U96.SI\">SEMBCORP INDUSTRIES LTD</a>, or SCI, displayed a lacklustre performance.</p><p style=\"text-align: start;\">Keppel saw its share price dip by 6.8% year-to-date (YTD) while SCI’s share price has inched up just 1.9% YTD.</p><p style=\"text-align: start;\">Both companies have detailed their long-term strategic plans in their Investor Day releases.</p><p style=\"text-align: start;\">These initiatives should provide investors with the confidence that they can do well in the future.</p><p style=\"text-align: start;\">So, which of these blue-chip stocks is a more compelling buy? We compare them across various financial metrics.</p><h2 id=\"id_3123254984\">Financial performance</h2><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/19b302a04ecf21f809fc3cc7fbbd37cb\" tg-width=\"743\" tg-height=\"296\"/></p><p>First, let’s look at each company’s financials for the first half of 2024 (1H 2024).</p><p>Keppel and SCI both saw year-on-year declines in revenue.</p><p>For Keppel, both its infrastructure and real estate divisions saw revenue fall by 10% and 44% year on year, respectively.</p><p>SCI saw its Gas and Related Services division post an 18% year on year fall in revenue that made up the bulk of the 12.3% year-on-year decline in group revenue.</p><p>Although both companies saw their net profit fall year on year, investors should be looking at their core net profit which excludes both discontinued operations and exceptional items.</p><p>If we look at core net profit, Keppel managed to post a small 6.7% year on year increase to S$513 million.</p><p><strong>Winner: Keppel</strong></p><h2 id=\"id_3707426125\">Financial strength</h2><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/a1b07982e6a0f370216acdfa1816afdd\" tg-width=\"742\" tg-height=\"297\"/></p><p>Next, we move on to each company’s balance sheet to explore their financial strength.</p><p>In doing so, we looked at Keppel and SCI’s net debt and compared it against shareholder equity and total assets.</p><p>Although Keppel had a higher overall net debt of S$10.2 billion compared with SCI’s S$7.2 billion, its net debt metrics looked healthier.</p><p>Keppel’s net debt to equity (net gearing) came in just below one while its net debt to total assets stood at 0.37.</p><p>These two metrics were lower than SCI which had net gearing at 1.42 times and net debt to total assets of 0.41.</p><p><strong>Winner: Keppel</strong></p><h2 id=\"id_3894343452\">Cash flow generation</h2><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/25ec910faba17456e5322ad8e04ed44a\" tg-width=\"742\" tg-height=\"241\"/></p><p>The next metrics we look at is each company’s cash flow generation ability.</p><p>For Keppel, its operating cash flow come in negative for 1H 2024.</p><p>When capital expenditure (capex) is accounted for, the asset manager churned out a negative free cash flow of S$423.6 million.</p><p>SCI managed to generate an operating cash inflow of S$517 million.</p><p>Capex, however, came in at S$568 million and caused the utility giant to turn in a negative free cash flow of S$51 million.</p><p>With both companies posting negative free cash flow, we favour the one that managed to at least generate a positive operating cash flow.</p><p><strong>Winner: SCI</strong></p><h2 id=\"id_2468283215\">Dividends and dividend yield</h2><p class=\"t-img-caption\"><img src=\"https://community-static.tradeup.com/news/2cd4af110466f8aa58fb45a0cda3d03a\" tg-width=\"745\" tg-height=\"387\"/></p><p>Finally, we come to the section that should interest income investors – dividends.</p><p>Keppel paid out a trailing 12-month dividend of S$0.34 which gave its shares a trailing dividend yield of 5.2%.</p><p>However, its interim dividend of S$0.15 remained unchanged from a year ago.</p><p>SCI, on the other hand, paid out a trailing 12-month dividend of S$0.14 which gave its shares a much lower trailing dividend yield of 2.6%, half of what Keppel’s shares are sporting.</p><p>However, the utility group did manage to raise its interim dividend by an impressive 20% year on year.</p><p>That said, we will prefer Keppel as its dividend yield is significantly higher than SCI, and the asset manager also could raise its dividends in future even if management did not do so this round.</p><p><strong>Winner: Keppel</strong></p><h2 id=\"id_895772828\">Investor Day round-ups</h2><p>Other than the above financial metrics, investors can also weigh each business based on its Investor Day targets.</p><p>The 1H 2024 results serve as a convenient checkpoint to gauge each company’s progress towards attaining its goals.</p><p>Keppel reported good progress towards its Vision 2030 goals with its asset management earnings more than doubling year on year to S$75 million in 1H 2024.</p><p>Its funds under management also grew by 55% from the end of 2023 till 1H 2024, aided by the acquisition of Aermont Capital.</p><p>Asset monetisations have also hit more than S$5.6 billion since October 2020.</p><p>SCI is also making healthy progress towards its 2028 goals that it set back during last year’s Investor Day.</p><p>Its renewables gross installed capacity hit 14.4 GW as of June 2024, more than halfway towards its target of 25 GW by 2028.</p><p>SCI also announced a new urban strategy just last month to increase its land for development to 18,000 hectares by 2028 (current: 14,000 hectares) and achieve an industrial property gross floor area of 1.5 million square metres (current: ~130,000 square metres).</p><h2 id=\"id_1069864755\">Get Smart: Keppel emerges as the winner</h2><p>After weighing the pros and cons of each company, Keppel emerges as the winner.</p><p>Keppel managed to eke out a small year-on-year rise in its core net profit and is also more conservatively financed compared with SCI.</p><p>Although the asset manager generated negative free cash flow, it managed to increase its funds under management and recurring income and is also making good progress on its asset monetisation efforts.</p><p>Furthermore, Keppel kept its interim dividend constant and its shares provide a high dividend yield of 5.2%.</p><p></p><p></p></body></html>","source":"thesmartinvestor_highlight","collect":0,"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>Better Blue-Chip Stock: Keppel Ltd Vs Sembcorp Industries</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{ 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.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\">\nBetter Blue-Chip Stock: Keppel Ltd Vs Sembcorp Industries\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-09-20 09:47 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://thesmartinvestor.com.sg/better-blue-chip-stock-keppel-ltd-vs-sembcorp-industries/><strong>The Smart Investor</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Blue-chip stocks are having a field day this year as the bellwether Straits Times Index  hit a 17-year high recently.However, two blue-chip stocks,  Keppel  and  SEMBCORP INDUSTRIES LTD, or SCI, ...</p>\n\n<a href=\"https://thesmartinvestor.com.sg/better-blue-chip-stock-keppel-ltd-vs-sembcorp-industries/\">Web Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"SG9999008742.SGD":"Eastspring Investments Unit Trusts - Singapore ASEAN Equity SGD","SG9999000343.SGD":"Schroder Singapore Trust A Dis SGD","SG9999006266.SGD":"MANULIFE SINGAPORE EQUITY \"A\" (SGD) ACC","SG9999013478.USD":"利安新加坡股息基金","SG9999013460.SGD":"LionGlobal Singapore Dividend Equity Fund SGD","SG9999005177.SGD":"Legg Mason Martin Currie - Southeast Asia Trust A Acc SGD","SG9999001135.SGD":"United ASEAN Fund SGD","SG9999001127.SGD":"United Singapore Growth Fund SGD","SG9999014302.SGD":"RHB Singapore Income Fund SGD","SG9999000475.SGD":"Aberdeen Standard Singapore Equity SGD","BK6523":"ESG概念","SG9999014492.USD":"NIKKO AM ASEAN EQUITY \"A\" (USD) ACC","BK6505":"周期性消费品与消费者服务","STI.SI":"富时新加坡海峡指数","SG9999014484.SGD":"Nikko AM ASEAN Equity Fund A SGD","SGXZ43160589.SGD":"UNITED SG DYNAMIC INCOME FUND \"A\" (SGD) ACC","IE00BYTNYN87.SGD":"PINEBRIDGE ASIA EX JAPAN SMALL CAP EQUITY \"A5\" (SGD) ACC","SGXZ24219693.SGD":"UNITED SG DYNAMIC INCOME FUND \"A\" (SGD) INC","IE00B12V2V27.USD":"柏瑞亚洲小盘股A(除日本)","U96.SI":"胜科工业","SG9999001226.SGD":"UNITED SUSTAINABLE ASIA TOP 50 \"A\" (SGD) ACC","SGXZ27511609.SGD":"NIKKO AM SINGAPORE DIVIDEND EQUITY \"SGD\" (SGD) ACC","SG9999003826.SGD":"日兴资管新加坡股息基金 SGD","SG9999016042.SGD":"Schroder Singapore Trust A Acc SGD","BK4007":"制药","BK6113":"复合型公用事业","SGXZ58947870.SGD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (SGDHDG) INC","SG9999013486.USD":"LIONGLOBAL SINGAPORE DIVIDEND EQUITY (USD) INC A","SG9999011746.SGD":"PINEBRIDGE INTERNATIONAL FUNDS - ACORNS OF ASIA BA (SGD) ACC","IE00BYQNZ168.SGD":"PINEBRIDGE ASIA EX JAPAN SMALL CAP EQUITY \"A5CP\" (SGD) ACC","BN4.SI":"吉宝有限公司","SG9999004360.SGD":"Nikko AM Shenton Thrift Fund SGD","BK6500":"公用股","BK6111":"工业集团企业"},"source_url":"https://thesmartinvestor.com.sg/better-blue-chip-stock-keppel-ltd-vs-sembcorp-industries/","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2468637913","content_text":"Blue-chip stocks are having a field day this year as the bellwether Straits Times Index  hit a 17-year high recently.However, two blue-chip stocks,  Keppel  and  SEMBCORP INDUSTRIES LTD, or SCI, displayed a lacklustre performance.Keppel saw its share price dip by 6.8% year-to-date (YTD) while SCI’s share price has inched up just 1.9% YTD.Both companies have detailed their long-term strategic plans in their Investor Day releases.These initiatives should provide investors with the confidence that they can do well in the future.So, which of these blue-chip stocks is a more compelling buy? We compare them across various financial metrics.Financial performanceFirst, let’s look at each company’s financials for the first half of 2024 (1H 2024).Keppel and SCI both saw year-on-year declines in revenue.For Keppel, both its infrastructure and real estate divisions saw revenue fall by 10% and 44% year on year, respectively.SCI saw its Gas and Related Services division post an 18% year on year fall in revenue that made up the bulk of the 12.3% year-on-year decline in group revenue.Although both companies saw their net profit fall year on year, investors should be looking at their core net profit which excludes both discontinued operations and exceptional items.If we look at core net profit, Keppel managed to post a small 6.7% year on year increase to S$513 million.Winner: KeppelFinancial strengthNext, we move on to each company’s balance sheet to explore their financial strength.In doing so, we looked at Keppel and SCI’s net debt and compared it against shareholder equity and total assets.Although Keppel had a higher overall net debt of S$10.2 billion compared with SCI’s S$7.2 billion, its net debt metrics looked healthier.Keppel’s net debt to equity (net gearing) came in just below one while its net debt to total assets stood at 0.37.These two metrics were lower than SCI which had net gearing at 1.42 times and net debt to total assets of 0.41.Winner: KeppelCash flow generationThe next metrics we look at is each company’s cash flow generation ability.For Keppel, its operating cash flow come in negative for 1H 2024.When capital expenditure (capex) is accounted for, the asset manager churned out a negative free cash flow of S$423.6 million.SCI managed to generate an operating cash inflow of S$517 million.Capex, however, came in at S$568 million and caused the utility giant to turn in a negative free cash flow of S$51 million.With both companies posting negative free cash flow, we favour the one that managed to at least generate a positive operating cash flow.Winner: SCIDividends and dividend yieldFinally, we come to the section that should interest income investors – dividends.Keppel paid out a trailing 12-month dividend of S$0.34 which gave its shares a trailing dividend yield of 5.2%.However, its interim dividend of S$0.15 remained unchanged from a year ago.SCI, on the other hand, paid out a trailing 12-month dividend of S$0.14 which gave its shares a much lower trailing dividend yield of 2.6%, half of what Keppel’s shares are sporting.However, the utility group did manage to raise its interim dividend by an impressive 20% year on year.That said, we will prefer Keppel as its dividend yield is significantly higher than SCI, and the asset manager also could raise its dividends in future even if management did not do so this round.Winner: KeppelInvestor Day round-upsOther than the above financial metrics, investors can also weigh each business based on its Investor Day targets.The 1H 2024 results serve as a convenient checkpoint to gauge each company’s progress towards attaining its goals.Keppel reported good progress towards its Vision 2030 goals with its asset management earnings more than doubling year on year to S$75 million in 1H 2024.Its funds under management also grew by 55% from the end of 2023 till 1H 2024, aided by the acquisition of Aermont Capital.Asset monetisations have also hit more than S$5.6 billion since October 2020.SCI is also making healthy progress towards its 2028 goals that it set back during last year’s Investor Day.Its renewables gross installed capacity hit 14.4 GW as of June 2024, more than halfway towards its target of 25 GW by 2028.SCI also announced a new urban strategy just last month to increase its land for development to 18,000 hectares by 2028 (current: 14,000 hectares) and achieve an industrial property gross floor area of 1.5 million square metres (current: ~130,000 square metres).Get Smart: Keppel emerges as the winnerAfter weighing the pros and cons of each company, Keppel emerges as the winner.Keppel managed to eke out a small year-on-year rise in its core net profit and is also more conservatively financed compared with SCI.Although the asset manager generated negative free cash flow, it managed to increase its funds under management and recurring income and is also making good progress on its asset monetisation efforts.Furthermore, Keppel kept its interim dividend constant and its shares provide a high dividend yield of 5.2%.","news_type":1},"isVote":1,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"tweetType":1,"langContent":"EN"}],"hasMoreComments":true,"newsSizeData":{"likeSize":7,"commentSize":2,"repostSize":2,"favoriteSize":3,"likeStatus":false,"favoriteStatus":false}}