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QAF Limited: Ideal For Dividend Hunters (5% Dividend Yield!)
Corporate Digest | 25 September 2015
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By: Joey Ho
Articles (30) Profile

QAF Limited (QAF) is a leading multi-industry food company primarily engaged in the manufacturing and distribution of packaged loaf bread under Gardenia and Bonjour, as well as an integrated pork production business in Australia under Rivalea.

Apart from the group’s 60 percent strong market share of the packaged loaf bread segment in Singapore, the group also produces 17 to 20 percent of the total pork produced in Australia.

While the group’s core businesses hold competitive strengths such as branding power, value-added product portfolio and extensive distribution networks, it constantly builds on its knowledge and research capabilities to develop new products as well as productivity initiatives to improve margins.

QAF’s expansion of its Gardenia brand in China is expected to contribute positively to the group’s results for FY15, as advertising and promotional activities saw positive response while its corporate social responsibility activities contributed to brand image and popularity.

QAF maintains high liquidity with a current ratio of 1.6 as of 30 Jun-15, with its current assets comprising 25.5 percent of cash and short-term deposits.
The group also has a 7 year record of positive free cash flow since FY08, highlighting its financial stability.

We expect QAF to maintain its stable dividend pay-out of $0.05 per share for FY15, offering a dividend yield of 5.05 percent based on the closing price of $0.99 as of 17 Sep-15.

Based on QAF’s latest full year EPS of $0.082 for FY14, it shares are currently trading at a PE of 12.1x, below Singapore’s consumer goods sector average of 13.6x.

In view of the group’s good financial management and stable business operations, we expect its shares to match the industry average, representing a probable upside potential of 12.4 percent based on the closing price of $0.99 as of 17 Sep-15.

Equipped with a bachelor in banking and finance, Joey covers the finance, technology and healthcare industry in Singapore.

Please click here for more information about this author.

QAF  0.710 +0.010 +1.43%   
Business: Multi-industry food Co with ops across the APAC region. [FY17 Turnover] Primary production (46.4%), bakery (40.1%), trading & logistics (12.9%), investment & others (0.6%).

Insight: Aug-18, 1H18 revenue fell 3.6% to $395.9m mainly d... Read More

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