Goodbye ComfortDelgro. I have sold ComfortDelgro from my stock portfolio. The name ComfortDelgro is no stranger to Singaporeans. The company owns a fleet of taxis and was once one of the most popular dividend stocks listed on Singapore Stock Exchange (SGX).
Of course, the above was before the existence of Grab. Grab was a disruptor to the traditional business model on how taxi companies work. Well, I am not going to touch on how to be a Grab driver but we all know how the Grab model works. You rent a car for as low as 50 bucks, pick up passengers with the Grab app, that’s it!
Below are the reasons why I sold off ComfortDelgro.
Declining Dividends
As you can see from the total dividend payout in recent years, it has been declining.
The COVID-19 pandemic has affected taxi hire badly. Due to the lockdown, there are hardly any passengers to ferry. As a result, the total dividend payout in 2020 was only 1.43 cents.
Even though things have slightly improve in 2021, I believe it will take time for taxi hire to recover since Grab remains a strong threat to ComfortDelgro.
| Financial Year | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 |
| Dividend (cents) | 4.2 | 1.43 | 9.79 | 10.50 | 10.4 | 10.30 |
Rising Petrol Costs (Due to Ukraine War)
Even though ComfortDelgro has invested in Electric Vehicle (EV) fleets, the fuel consumption remains high. This means the majority of the taxi fleet has yet to convert to EV.
Because of the Ukraine war with Russia, petrol prices has rose to sky high levels. I believe this will increase operating costs which will eat into ComfortDelgro’s revenue.
Declining Share Price
As you can see from the 5 year chart above, the share price is on a downtrend. I doubt it will recover anytime soon.
Summary of Goodbye ComfortDelgro
ComfortDelgro is one of the earliest stock I own in my stock portfolio. Even though stock prices have decline significantly over the years, I still made a nifty profit after selling off ComfortDelgro. This is inclusive of dividends that I have collected over the years.
Goodbye!
Companies that do fleet rental and makes profit out of their earnings and vehicle rental has to think twice, the driver termed hirer or relief are not getting younger, yet there’s not equilibrium on high operating cost and low fares in Singapore for taxis, comparison to other countries where car ownership is highest in the world in Singapore, taxi fares and ride hailing platforms, drivers are made to work long hours on daily, rain or shine.
As the industry minimum driver age from 30 years onwards, it’s a gruelling industry for the semi retired drivers to take such long hours posing health and safety risks.
A country where car ownership and fleet ownership is the highest in the world, taxi and ride hailing fares are dirt.
With high rental and expandables, drivers work their fingers to the bone for miserable income with no CPF contribution, medisave nor medical benefits unless the driver ends up hospitalised.
Buying into stocks like this where companies treat the drivers or delivery personal as though they’re not an asset to the company shows in their companies stock prices.
I drove my good fruitful years of my life being a cabbie because of job disruption, what was my experience?
Irregular incomes, literally zero savings, mountain full of car accident injuries due to careless motorists.
Thanks but no thanks, I quit.