ST Engineering is a Singapore company specializing in Aerospace, Electronics, Land Systems and Marine sectors.
Market Capitalization
Dividends
ST Engineering pays stable yearly dividends. From the table below, you can see that even during the year of recession (2008 Global Financial Crisis), ST Engineering still manages to maintain and pay out a dividend of 15.80 cents. The dividend payout ratio is also healthy and sustainable, well maintained below 100% (except for 2006).
| Year | 2005 | 2006 | 2007 | 2008 | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 |
| Total dividend (cents) | 13.6 | 15.11 | 16.88 | 15.80 | 13.28 | 14.55 | 15.50 | 16.80 | 15.0 | 15.0 |
| Earnings per share (cents) | 14 | 15 | 17 | 16 | 15 | 16 | 17 | 19 | 19 | 17 |
| Dividend payout ratio (%) | 97% | 101% | 99% | 99% | 89% | 91% | 91% | 88% | 79% | 88% |
Debt
| Year | 2010 | 2011 | 2012 | 2013 | 2014 |
| Net interest expense (SGD dollar in million) | 87 | 64 | 50 | 78 | 45 |
| Operating Income (SGD dollar in million) | 587 | 608 | 658 | 673 | 555 |
| Debt service ratio (%) | 14.8% | 10.5% | 7.6% | 11.6% | 8.1% |
Investment Moats
Strong Global Presence
ST Engineering has a strong global presence. They have offices in Americas, Europe, Africa/Middle East and Asia Pacific.
High Switching Cost
If you are aware, most of MINDEF weapons and defence systems are mostly innovated and developed by ST Electronics (Info-Comm Systems). One good example is the SAR 21 rifle that we use in the Singapore Army. Unlikely Singapore Army will replace all SAR 21 rifles with other weapons in the short term.
Patents
Below are patents by ST Electronics (Satcom & Sensor Systems).
a) Digital Communication System and Method
Awarded the certificate of grant of patent for our invention relating to a digital communication system and method that sends and receives data to and from stations in a satellite communication system, digital radio and cellular telephony.
b) Portable Satellite Terminal
The invention relates to a portable satellite terminal for satellite communication that is able to send and receive data to and from stations in a satellite communications system. The system can be operated by one person and can be mounted on a vehicle, vessel or building.
c) Motion Detector
Awarded the certificate of grant of patent for our invention, generally relating to the field of the motion detectors, and in particular, to a motion detector which can efficiently and cost-effectively suppress harmonic frequencies emanating from the motion detector.d) Combined Motion Detection and Shock Sensing Apparatus
We were also awarded the patent for the invention relating generally to the field of motion detection and shock sensing devices, and in particular, to a motion detector which can also detect shock or vibration.
ST Engineering has strong government support. The following is extracted from ST Engineering website “ST Electronic’s Large-Scale Systems Group (LSG™) is a leading electronic system provider that serves customers in the areas of transportation, intelligent building and defence. Established in 1969, the group was set up to provide repair and maintenance services to the Ministry Of Defence, Singapore.”
Investment Strategy
“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” – Warren Buffett