SBS Transit shares rally past S$4 on bumper dividend, stronger cash flow visibility

[SINGAPORE] Shares of public transport operator SBS Transit have surged past the S$4 mark in April – the first time since 2019. The strong showing comes on the back of an outsized dividend payout and growing investor appetite for stable, yield-generating stocks.

On Thursday (Apr 16), the counter opened at S$4.15, and was down S$0.02 or 0.5 per cent at S$4.12 as at 11.16 am. It had gone as high as S$4.21 on Monday, having breached S$4 since Apr 9.

The counter’s all-time high was S$4.72 during intra-day trading on Jun 21, 2019.

Shekhar Jaiswal of RHB Bank Singapore said the announcement of a significant full-year dividend was the immediate rerating catalyst for SBS Transit, although the share price had already been trending up since late last year.

“In our view, the continued strength in the share price as the stock moves closer to the ex-dividend date largely reflects a compression of that implied yield, as investors position for the dividend while also placing greater value on SBS Transit’s strong balance sheet, visible cash flows under the government contracting model, and resilient earnings profile,” he said.

The counter has climbed from around S$2.80 in July 2025, although it has seen a sharp rise since Feb 20, 2026.

Big payoff?

On Feb 24, the company posted its full-year results for FY2025, where its net profit fell 13 per cent to S$61.2 million and revenue slipped 2.7 per cent to S$1.5 billion.

However, it announced a total dividend of S$0.496 per share for 2025, with a payout ratio of 253 per cent.

“Based on the share price on the date of announcement, the implied yield was about 14.4 per cent, which is unusually attractive for a defensive domestic transport operator,” said Jaiswal.

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He added that the share price spike came after the FY2025 results were released on Feb 24, with the announced dividends supported by excess capital on the balance sheet.

But the strong share price of the company, which is a subsidiary of transport giant ComfortDelGro, is also at least partly due to contract wins and solid performance.

This was supported by the company’s win on the Jurong Region Line contract, where it will partner French transport operator RATP Dev, which was announced in November 2024.

More than 60,000 households will be within a 10-minute walk from a train station after the Jurong Region Line, Singapore’s seventh MRT line, becomes operational. However, the line’s opening has been delayed for six months, and is targeted to open in mid-2028 instead.

“The structure of that contract is important because it passes fare revenue risk to the government, which further improves cash flow visibility and reduces earnings volatility,” added Jaiswal.

Shares of the counter closed on Thursday at S$4.12, down 0.5 per cent or S$0.02.