SCC (0158) ... Dividend Yield Stocks, Net CAsh rm0.35/Share
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It
may appeal to yield seeking investors. Dividends increased from rm0.05
per share in 2010 to rm0.10 per share in 2012-2013, translating
into a higher than market average net yield of 6.7%.
Although
earnings have been somewhat flattish over the past few years prior to
March 2015, the company has a solid balance sheet with net
cash of rm15.0 million or rm0.35 per share. Its trading business – SCC
is mainly involved in the distribution of non antibiotic animal health
products and food service equipment and supplies such as rapid cooking
ovens, pressure flyers and popcorn ingredients
– is asset light. Thus dividends should be sustainable.
Sales
increased from rm35.6 million in 2011 to rm38.7 million in 2013 but pre
tax profit declined from rm7.2 million to rm6.9 million. Net
profit margin was decent, at 13.1 – 14.6% during the same period. With
no borrowings ROE was high, averaging 15.9% from 2011 to 2.13.
For
2014 sales increased 5.9% year on year to rm41.0 million while pre tax
profit surged 30.9% to rm9.0 million mainly due to higher sales
of food service equipment and supplies.
SCC
started distributing animal health products in 1974. Its main suppliers
are US based Anitox Corp, a global leader in the control of pathogens
and other unwanted microbes and South Korea Hyun Young International
Corp. The company concentrates on clean feed solutions as well as other
non antibiotic animal feed additives.
The
food service equipment segment began in 1978 after the company’s
founders ventured into the fast food industry. Some of SCC’s poultry
farm customers also followed the same path, thereby boosting demand for
its food service equipment. The unit accommodated for 58.7% of sales in
2013 with the balance coming from animal health products.
It is trading at a trailing 12 month PER of 9.7 times and PER of 1.89 times.
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