VICOM - what's there not to like about this company?

Car ownership such a problem in land scarce Singapore.  Especially in recent years with the high price of the infamous Certificate of Entertainment (COE).  With the stroke of a pen (or a paper) and one foots out tens of thousands of dollars before even talking about the cost of the car itself.  And thereafter, there's the cost of road tax, insurance, fuel and maintenance.  Not to forget, the car is a rapidly depreciating asset of 10 years. It's a real money sucker.  So, don't invest in the car.  Invest in something that benefits from car ownership. Who else then but VICOM?



What's there not to like about this company? Every car needs to have its periodic car inspection. It's regulated. That's a guaranteed business.

Are people going to move away from car ownership?  Naw.  Not even if the MRT lines work well and taxi drivers decide to drive under all weather, all hours.

Is VICOM well run?  A visit to VICOM would show just how few workers they need to transact each car through its inspection process.  The process is well oiled and highly automated. Keeps churning away.

Stock Data
Market Capitalization (SGD 'mil)	523.76
Common Shares Outstanding ('mil)	88.6140
52 Week High (SGD) (14/05/2014)	5.940
52 Week Low (SGD) (21/06/2013)	4.550
52 Week Return (%)	22.680
Average Volume ('mil)	0.0064
Beta	0.28

Financial strength
Current Ratio	3.49
Quick Ratio	3.48
Long Term Debt to Equity (%)	-
Total Debt to Equity (%)	-
Interest Coverage Ratio (TTM)	-
Free Cash Flow to Firm (TTM) (SGD 'mln)	21.94

Margin
Gross Margin (TTM) (%)	42.52
Operating Profit Margin (TTM) (%)	32.59
Net Profit Margin (TTM) (%)	27.84

Dividend §
Annual Dividend per share (SGD)	0.1610
Dividend Yield (TTM) (%)	2.72
Dividend Yield (Annual) (%)	2.72
Payout Ratio (TTM) (%)	68.66
3-Year Growth Rate (%)	7.67

Valuation
Historical P/E Ratio	18.38
P/E Ratio (TTM)	18.04
P/BV (latest interim)	3.81
BVPS (latest interim) (SGD)	1.5502
EPS TTM (SGD)	0.3276

DPS (SGD)	0.1180	0.1290	0.1440	0.1500	0.1610
EPS (SGD)	0.2333	0.2559	0.2865	0.2989	0.3215

[Source: POEMS]

Given the above, we can see that it has very good margins, and absolutely no debts!  

Its dividend payout has been great - currently at 2.72% and deceivingly lower, but would usually be much higher by the end of each FY.  Its dividends has been consistently climbing up from 0.118 (FY09) to 0.161 (FY13).  DPS has also maintained below EPS throughout the past 5 years. Hard to find such companies on the SGX.  Tell me if you know of others with such a characteristic.  I consider this to be one of the high yield and dividend paying stock.  

There's probably not much room for significant growth though, so don't expect heart-stopping growth. But it should remain steady.  Does anybody actually check how much they pay for each car inspection? I'm guessing probably not. Just pay! And in fact, with more than just a sense of gratitude to get a pass so that you can continue to use the car without needing further work. I could hear the expletives from the truck driver in the next lane whose car didn't.

P/E ratio perhaps a bit high right now.  But what's there not to like about this stock?  Really.

[Disclaimer: This is a not a call to buy or sell.  Merely a record of why I invested in this stock.]