|3 Year Chart|
The other well-known stock will be Sembcorp Industries. Similar to Straits Trading, I will be eyeing on this stock and it seems like oil prices have started to stabilize. With my own research, I will rate Sembcorp Industries at 7.1/10 at the current valuations. Keppel Corp will score higher at 8.5 but its current price is of a higher premium as well. Last year, I have given this a pass due to the instability of OPEC’s situation and uncertainty made from political issues and elections. Sembcorp Industries’ resilient Net Income did not even reach near deficits level despite the public’s focus on plunging oil prices. This is because its business risks are well diversified into multiple sectors ; energy, urban developments , utilities, waste management while its Marine arm focus on rigs and shipbuilding. Like a replicate of Keppel Corp, both are pillars that will be difficult to take down due to the well diversified business nature. With utilities as one of its core, it is somewhat a defensive stock to me. However, Sembcorp’s Net income only grew about 16% from 2005 to 2015 (using first /last 3-years average) and its debts are rising in the recent years. I will recommend adding it to your watch list as a start.