Is SBS Transit Stock a Good Buy Now? (SGX: S61.SI) >7% Dividend? For Real?
Last Updated on 4 weeks ago by Antony C.
Right now SBS Transit (S61/ SBVV.SI) share price is at SGD$3.200. At this price, SBS Transit is valued at a price-to-book ratio of 1.483 and a trailing distribution yield of 7.340% (normally around 3%). With the current valuation, would I invest in it?
Let’s go through it using my 7 steps guide to start investing in Singapore and find the perfect Dividend Stocks.
- Debt to Equity Ratio
- Dividend Yield
- Dividend Payout Ratio
- EPS Growth Rate
- Return of Equity (ROE)
- Price-to-Book Ratio
- MOAT
Disclaimer: I may or may not have invest in any of the stocks/REITs/ETFs, what’s listed here is only for entertainment purpose only and it should never be used as any form of investment advice. Past performance ≠ future results. While I’ve been investing for +15 years, I am still learning, this is my stock investment diary, and I wish to share what I learn during my investment journey so you may learn from both my success and mistakes. Enjoy!
Business Background
SBS Transit is in the transportation sector and it operates Singapore’s public bus and rail services, running a large fleet of buses and managing several MRT and LRT lines.
Started in operation in 2003, it is a major transport focus company operating in Singapore.
Business Types
- Bus Operation
- Rail Operation
- Advertising
- Rental of Commercial Spaces
Bus Operation
SBS Transit run a fleet of over 3,500 buses operating close to 200 different services across the island, 54.3% of bus operation market share.
Light Rail Transit (LRT) Operation
- Sengkang (SPLRT)
- Punggol (SPLRT)
Mass Rapid Transit (MRT) System
- North East Line (NEL)
- Downtown Line (DTL)
In addition to passenger transport, the company provides related services like advertising space in its public areas and commercial space for rent at stations and interchanges.
1. Debt To Equity Ratio
Check for: Less than 0.5 D/E Ratio
Looking at the latest online data for SBS Transit.
SBS Transit have a D/E ratio of 0.008.
This is significantly lower than 0.5. Basically BSB Transit is cash rich!
A lower debt-to-equity ratio indicates the company is not over-leverage and using less debt or, “borrowed money” to finance the company’s operations.
Lower debt means a lower risk of the company defaulting. This is a good sign when we are looking for a low-risk investment.
My Opinion: Pass
2. Dividend Yield
Check for: More than a 2.5% dividend yield
For the Year 2025, SBS Bus pays a huge dividend of 0.321 which translates to a dividend yield of over 7.390%.
This is much higher than my target of 2.5%
| Year | Dividend in SGD |
|---|---|
| 2025 | 0.321 |
| 2024 | 0.112 |
| 2023 | 0.110 |
| 2022 | 0.079 |
| 2021 | 0.121 |
| 2020 | 0.059 |
| 2019 | 0.071 |
| 2018 | NA |
Looking at the past few years, I can see that the dividend are growing year-on-year (y-o-y) which is a good sign of a great dividend stock. Also, it pays out dividend for almost every year apart from 2018.
While SBS Transit have a huge cash balance, but having such a high dividend yield in 2025, which is 3 times more than 2024, this makes me think, WHY?
Currently, it offer higher dividend yield than the risk-free rate (CPF OA Account) of 2.5%. And with just this aspect, I will probably give it a verdict of pass.
But personally, I don’t feel comfortable on this, and it feels a bit too good to be true. My guess is that it is a one-time only high dividend to help give investors confident.
My Opinion: Pass
3. Dividend Payout Ratio
Check for: Less than 80% dividend payout ratio
At the time of writing, a quick check online shows that the dividend payout ratio for SBS Transit is at the high of over 93.71% which is far higher than my threshold of 80%.
A high payout ratio means there is little to no upside potential for increasing the dividend in the future.
I personally don’t think the payout ratio makes sense as it is really high. As the government is looking to push for more environmental friendly vehicles, more cash should be used to upgrade the bus and trains.
With a high dividend payout, it means, there is little to no cash to be reinvested into the business, which I don’t think is a good idea.
My Opinion: Fail
4. EPS Growth Rate
Check for: More than 10% EPS Growth
A constantly growing EPS will be the perfect scenario for a perfect company.
A quick check on online financial data.
The EPS 5 year growth rate is a whopping -2.885%!
This is in the negative, which just fail meet my threshold of 10%
My Opinion: Fail
5. High Return Of Equity (ROE)
Check for: More than 10% ROE
ROE is one of the most important ratios used by Warren Buffett.
Return on Equity is a profitability ratio that measures the ability of the company to generate income from shareholders’ money (equity). In other words, a higher ROE will mean a higher return for each dollar the shareholder invested in the company.
At the time of writing, the ROE of SBS transit have an ROE of 10.03%.
This is acceptable and just meet my criteria of 10% ROE.
My Opinion: Pass
6. Price-to-Book Ratio
Check for: a P/B Ratio of less than 1.8
SBS Transit is a blue chip company with is traded commonly by moms and pops. This means it will be almost impossible for this company to be traded below its book value.
At the time of writing, the current P/B ratio of SBS Transit is 1.474.
This means it is trading at a 47% premium to its book value.
My Opinion: Pass
7. MOAT
Check for: Not just having a MOAT, but a great MOAT
SBS Transit is a transport service company with a business that is simple to understand. From what I see, it have a high barriers to entry, requiring significant economies of scale, and the approvals from the regulatory framework of Singapore’s public transport system
SBS Transit is basically a government-regulated duopoly/oligopoly.
SBS Transit is Singapore’s largest public bus operator, running over 200 bus services with a fleet of over 3,500 buses.
Operating 2 of 6 MRT Lines:
- North East Line (NEL)
- Downtown Line (DTL)
Operating two Light Rail Transit (LRT) Lines:
- Sengkang LRT (SPLRT)
- Punggol LRT (SPLRT)
SBS Transit is pretty much the only transport operator operating in the North East of Singapore.
According to Phil’s book Rule#1 investing, SBS Transit has a strong Toll MOAT. As this company has exclusive control of the marketplace.
My Opinion: Pass
Stocks Scorecard Verdict: SBS Transit
Below is how I’ve scored SBS Transit.
| Metrics | Weightage | Score |
|---|---|---|
| Debt to Equity Ratio | High (2) | 2 |
| Dividend Yield | Low (1) | 1 |
| Dividend payout ratio | Low (1) | 0 |
| EPS Growth Rate | Low (1) | 0 |
| High Return on Equity (ROE) | Low (1) | 1 |
| Acceptable Price-to-Book Ratio | Low (1) | 1 |
| MOAT | Very High (3) | 2 |
| Total | NA | 7 |
Overall Score: 7/10
For what I see, SBS Transit has low debt and a strong unbeatable MOAT.
However, the dividend payout ratio is high, very high, and a negative EPS Growth rate which makes me very uncomfortable.
I do have some position in SBS Transit and a long-term dividend play, but will probably not add to my position, I will be putting SBS Transit on my watchlist.
Why Do I Find Some Metrics More Important Than Others?
There are 3 attributes in a company that Warren Buffett wants in particular:
- Wonderful Company at Fair Price
- Stable & Understandable Business
- Vigilant Leadership in Risk Management
This translate to the following 3 metrics I have on my list:
Thus, for these metrics, I will put a higher weightage on my scoring.
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Antony C. is a Singaporean dividend investor focused on building passive income through REITs, ETFs, and Dividend Stocks. With 15+ years of experience investing in Singapore, Hong Kong, and China markets, he founded IncomeBuddies.com to share practical wealth-building strategies tested in his own portfolio since 2008. His expertise has been featured in Yahoo Finance, Nasdaq, and NFAA, and he’s the published book author of "Start Small, Dream Big".