ComfortDelGro’s Impressive Growth and Dividend Boost: A Promising Mobility Leader
Lim & Tan Securities | March 26, 2025
ComfortDelGro, the leading multi-modal transport operator, has delivered an exceptional performance in the financial year 2024, showcasing its resilience and growth potential. The company’s annual report highlights the key developments that have propelled it to new heights, making it an attractive investment opportunity for investors.
Expanding Global Footprint and Diversified Operations
In 2024, ComfortDelGro witnessed exciting developments as it navigated the dynamic global landscape. The company’s Public Transport business saw steady recovery in key markets, with reduced volatility in energy prices and declining interest rates. Notably, the company’s international operations have grown significantly, with its rail network expanding four-fold from 83km in 2021 to 343km in operation and under mobilization.
Winning Major Contracts Abroad
In Australia, ComfortDelGro was awarded three bus franchises in Victoria, valued at A$1.6 billion over a 10-year term, representing a 30% growth in its Victoria public bus business.
In the United Kingdom, the company’s subsidiary Metroline won and started operating four public bus franchises worth £422 million in Greater Manchester, increasing its overall portfolio by 30%.
ComfortDelGro’s joint venture with the Go-Ahead Group was awarded an 11-year contract to operate and maintain the Stockholm Metro, which will be the company’s largest rail operation outside of Singapore.
In Singapore, the joint venture between SBS Transit and RATP Dev, Singapore One Rail, was awarded the contract to operate the Jurong Region Line, which will open for passenger service in 2027.
Robust Financial Performance
For the financial year ended 31 December 2024, ComfortDelGro delivered a strong performance, with Group revenue increasing by 15.4% to S$4.48 billion, compared to S$3.88 billion in 2023. Profit After Tax and Minority Interest (PATMI) climbed by 16.6% to S$210.5 million in 2024, up from S$180.5 million in 2023.
The improved earnings were driven by the renewal of bus contracts at better margins in the UK, as well as higher fares and ride-hailing commission rates for taxis and private hire vehicles (PHVs). The company’s dividend policy has also been updated, with a payout ratio of at least 70% of PATMI, up from the previous 60% level.
Outlook and Valuation
At its last traded price of $1.47, ComfortDelGro is capitalized at $3.2 billion and trades at 13x forward and 12x prospective PE, respectively. The company’s dividend yield is an attractive 5.3%, and the consensus target price of $1.73 implies a 1-year potential capital return of 18%.
Given ComfortDelGro’s strong growth trajectory, attractive valuation, and robust dividend policy, the research team at Lim & Tan Securities maintains an “Accumulate” rating on the stock. The company’s diversified operations, global expansion, and consistent financial performance make it a compelling investment opportunity for investors seeking exposure to the dynamic transportation and mobility sector.
