Getting ready for a CNY rally when this counter announces its dividends.
UE E& C seen to pay bumper dividends
Due to consistently strong earnings.
Maybank Kim Eng anticipates a big windfall of cash for UE E& C on the back of another strong yearly performance, which will mean up to 6-7 cents dividends for FY14, pleasing investors with a 6.3-7% yield.
Bumper dividends up ahead. UE E& C is trading at 5.4x historical P/E, or ex-cash of 1.9x P/E. Assuming flat construction earnings and a stable 27% dividend payout the same as FY11 and FY12, we roughly estimate UE E& C could pay up to 6-7 cents in FY14 (versus FY12?s 5 cents), which translates to a 6.3-7% yield. We note UE E& C has paid up to 6 cents previously when it initially listed due to bumper earnings from project completions.
A couple of days ago, OCBC put up a report on how an earnings spike due to “Completion of Contract” accounting method led to a subsequent surge in Oxley’s share price. It then went on to mention 2 other companies which would see jumps in earnings due to the same accounting practice, albeit on a much smaller scale.
Meanwhile, come 2014, UE E&C could be the stock to watch for “Completion of Contract” lumpy profits. My earlier posts has highlighted that Austville Residences which will TOP in 2014, and whose profits will be booked lump sum, at one go.
Furthermore, Water Colours is also 100% sold and will TOP next year. Smooth sailing ahead for UE E&C.
Price has been slow and steady increase everyday. Is this because of the anticipated dividend announcement when the full year annual report is released at the end of this month? (estimated 27th feb)
More and more people has taken note of this good yielding counter with good growth potential. Do not wish to regret if missed the boat that is about to set sail and have purchased a few lots.
The Board of Directors of UE E&C Ltd. (“UE E&C” or the “Company”) is pleased to announce
that Greatearth Construction Pte Ltd, a wholly-owned subsidiary of the Company has been awarded
the main contract for the proposed erection of one block of 19-storey educational institution with one
basement for Lee Kong Chian School of Medicine, Nanyang Technological University at Mandalay
Road (Novena Campus) and one block of 7-storey School of Medicine at Nanyang Drive (NTU’s
Yunnan Garden Campus) (the “Project”). The total contract sum for the two campuses is at
approximately S$243.5 million.
The contract periods for Novena Campus and NTU’s Yunnan Garden Campus are 27 months and
16 months respectively.
With the addition of this Contract, the Group’s order books stood at approximately S$750 million as at 13 February 2014.
$750million worth of projects. Wow! Congrats to all those vested.
Full year results out on 27th Feb according to SGX calendar.
Expect good results with at least 5-7c dividend which translates to a yield of 4.7%-6.6%.
Which other blue chip stock can compare with UE E& C which has such an amazing yield? Furthermore, this is a growth company so capital appreciation is in the cards as well.
Just for easy reference:
Currect project book value of $750 million
30% stake in Austville Residences EC. Fully sold and will receive TOP by 1Q2014.
30% stake in Watercolours EC. Fully sold and will receive TOP in 2015.
30% stake in Waterwoods. Appointed main contractor (Great Earth) for the project.
20% stake in a residential development on Prince Charles Crescent(named The Crest). JV with Wing Tai and Metro. Appointed main contractor for the project.
High synergy with parent company United Engineers. Assured of future jobs from them.
UE E& C is trading at 5.4x historical P/E which is obviously very cheap. Zero debts. High ROE, ROA and profit margins. Coupled with the constant generation of free cash flow, the company is in a very strong position to grow.
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