Is SIA Engineering a GOOD Buy Now? (SGX: S59 / S59.SI) Getting >2.5% Dividend?
Last Updated on 4 weeks ago by Antony C.
SIA Engineering (a subsidiary of Singapore Airlines Limited) is listed in SGX with the ticker symbol S59.SI / SIAE.SI, it is currently has a share price of SGD$3.730. At this price, SIA Engineering is valued at a price-to-book ratio of 2.463 and a trailing distribution yield of 2.55%. With the current valuation, would I invest in it?
By understanding how to identify a good dividend stock, here are the 7 steps I use to pick the Best Dividend Stocks in Singapore.
- 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
SIA Engineering Company (SIAEC) Limited is based in Singapore and was incorporated in 1982. It was part of Singapore Airlines until 1992, Singapore Airlines transfer its maintenance, repair, and overhaul activities (MRO) into an existing subsidiary to form SIA Engineering Company.
Today, SIA Engineering provides service to over 200 flights into and out of Singapore Changi Airport each day for more than 60 international passenger and cargo carriers.
Segments of Business
- Airframe and Line Maintenance
- Engine and Component
Airframe and Line Maintenance
Service Sub-segments
- Airframe maintenance
- Line maintenance
- Fleet management programs
Service Provided
- Schedule routine and specialized maintenance and overhaul
- Modification and refurbishment programs
- Aircraft certification
- Technical and non-technical ground handling services
- Provision of aircraft ground support equipment and rectification work
- Fleet technical management
- Inventory technical management services
Engine and Component
Service Sub-segments
- Component overhaul
- Engine Repair
- Overhaul services
Service Provided
- Manufactures aircraft cabin parts and tooling for the aerospace industry
- Repair and overhaul services for hydro-mechanical equipment for aircraft
- Engine maintenance, parts repair, storage and preservation, material management, on-wing, and engine testing services
Joint Ventures
SIA Engineering has invested in 23 joint ventures on manufacturing of original equipment manufacturers, or OEMs, aircraft component repair, engine component repair, and overhaul services in both Singapore and overseas.
- Singapore, Australia, China, Hong Kong, Indonesia, the Philippines, Taiwan, and Ireland.
1. Debt-To-Equity Ratio
Check for: Less than 0.5 D/E Ratio
Looking at the latest financial report.
SIA Engineering have a D/E ratio of 0.036.
This is lower than the 0.05 D/E Ratio.
A D/E ratio of less than 0.5 will means that the company will be able to fulfill its debt obligation and there is a low risk of the company defaulting.
With a D/E of lower than 0.5, it passes my criteria and to understand this stock better, I’ve done a quick look at the past Debt to Equity Ratio for SIA Engineering:
| Year | Debt to Equity (D/E) Ratio |
|---|---|
| 2025 | 0.036 |
| 2024 | 0.052 |
| 2023 | 0.05 |
| 2022 | 0.025 |
| 2021 | 0.055 |
| 2020 | 0.069 |
| 2019 | 0.013 |
| 2018 | 0.015 |
Looking at the past data of SIA Engineering, it seems that the D/E ratio has always been less than 0.5, and in fact, it has always been less than 0.1 D/E Ratio.
As SIA Engineering’s business is highly dependent on the aviation industry, the number of flights, it is highly depending on how Singapore economic growth plays out in the long terms.
The recent D/E ratio shows great promise of this stock that the company is able to keep its leverage low even in times of trouble.
The company has less than a 0.5 D/E ratio
My Opinion: Pass
2. Dividend Yield
Check for: More than a 2.5% dividend yield
For the Year 2025, SIA Engineering pay a dividend of SGD 0.095 which is about 2.55% in dividend yield.
2.55% yield is higher than my target of 2.5%.
| Year | Dividend (TTM) SGD |
|---|---|
| 2025 | 0.095 |
| 2024 | 0.08 |
| 2023 | 0.00 |
| 2022 | 0.00 |
| 2021 | 0.00 |
| 2020 | 0.05 |
| 2019 | 0.11 |
| 2018 | 0.12 |
| 2017 | 0.18 |
Looking at the distribution history, the last dividend payment is in the year 2020, which is probably due to the pandemic.
While SIA Engineering did not pay any dividends for the years 2021 to 2023, it start to pay dividend as the company turns profit, which is a good sign.
For dividend stocks, I’ll prefer if they will pay a stable dividend that is growing, and a management team that knowns when to pay dividend and when not to.
The dividend yield higher than the risk-free rate (CPF OA Account) of 2.5%.
My Opinion: Pass
3. Dividend Payout Ratio
Check for: Less than 80% dividend payout ratio
At the time of writing, I’ve done a quick check with online tools for stock info, it shows that the dividend payout ratio for SIA Engineering is 65.65% which is below the 80% threshold.
With a payout ratio of less than 80%, it means the company retained some earnings to help grow the company.
The company knowns when to have some cash flow to operate the business, especially when the business is growing as the number of flights transiting Singapore increases.
My Opinion: Pass
4. EPS Growth Rate
Check for: More than 10% EPS Growth
Here, we will like to see an EPS growth of 5 years or more.
A quick check on the financials.
The EPS 5 year growth rate is 0.9%! The Earning Per Share (EPS) looks a bit low for SIA Engineering!
Knowing SIA Engineering is in the aviation industry, it maybe still recovering from the previous high EPS. Thus we will deep dive into the EPS history to understand the company further.
| Year | EPS |
|---|---|
| 2025 | 0.1246 |
| 2024 | 0.086 |
| 2023 | 0.09 |
| 2022 | NA |
| 2021 | NA |
| 2020 | NA |
| 2019 | 0.18 |
| 2018 | 0.16 |
While if we look at 5 years EPS, it shows as a low growth, we look at the year-on-year EPS Growth it is massive, which shows that the industry is recovering and SIA Engineering is actually doing well.
Sometimes, we cannot just look at numbers, we need to deep dive and understand the reason behind the numbers. Even so, the 5-year EPS looks bad, I think it is actually a good growth in EPS when we look at 3-year growth rate.
My Opinion: Fail on surface but it is actually a “Pass”
5. High Return Of Equity (ROE)
Check for: More than 10% ROE
ROE is the most important metric that I value.
Return on Equity (ROE) is often used to measure the management’s ability to make money.
At the time of writing, the ROE of SIA Engineering have an ROE of 8.9%.
| Year | Return on Equity (ROE) |
|---|---|
| 2025 | 8.9% |
| 2024 | 5.8% |
| 2023 | 5.5% |
| 2022 | 4.3% |
| 2021 | -0.7% |
| 2020 | 12.3% |
| 2019 | 10.7% |
| 2018 | 12.4% |
SIA Engineering’s historical ROE shows to be above 10% ROE before the pandemic. Even in 2020, it is still able to maintain a high ROE. But in 2021, it has a negative ROE of -0.7%. Now, it have started to grow above 5%.
The growing ROE is probably due to the recovery from the pandemic and growth as there are more flights in and out of Singapore as the ROE has returned to positive and up to above 5%.
My Opinion: Pass (Great!)
6. Price-To-Book Ratio
Check for: a P/B Ratio of less than 1.8
SIA Engineering has been around for almost 40 years, and if an investor invests in SIA, they will probably know SIA Engineering.
If I have to guess its P/B ratio, the price of the stock will most likely be traded around its valuation (book value).
At the time of writing, the current P/B ratio of SIA Engineering is 2.463.
Meaning, it is trading slightly above its book value.
My Opinion: Pass (Great!)
7. MOAT
Check for: Not just having a MOAT, but a great MOAT
SIA Engineering is probably the most important company that ensures the smooth operation of aircraft coming in and out of Singapore Changi Airport.
Similar to SATS which provides food for the plane, SIA Engineering provides all the services required for an aircraft to fly safely in the air.
SIA Engineering is the only major aircraft servicing center that services all aircraft that come in and out of Singapore Changi Airport.
SIA Engineering’s Top Competitors
- SIA Engineering, service in Singapore, Philippines
- Aviation Technical Services (ATC), service in the United States
- Hong Kong Aircraft Engineering (HAECO), service in Hong Kong, China, United States
- ADC Engineering, service in the United States
- Interstate Engineering, service in the United States
SIA Engineering Licensing
More than twenty national aviation regulatory authorities have issued approvals to the company to provide maintenance, repair, and overhaul services to aircraft subject to their jurisdiction.
- Civil Aviation Authority of Singapore (CAAS)
- United States Federal Aviation Administration (FAA)
- European Aviation Safety Authority (EASA)
- Japan Civil Aviation Bureau (JCAB)
- Etc.
With its base in Singapore, SIA Engineering serves over 60 airlines passing through Singapore.
SIA Engineering has one of the strongest ” Toll Bridge MOAT.
Not only it requires the government to issue licenses to allow the operation of companies such as SIA Engineering.
Approval from the authorities from different countries is required for the operation of a company similar to SIA Engineering.
The toll bridge moat prevents competitors from coming into the picture, allowing SIA Engineering to have most of the business that comes through Singapore Changi Airport.
With Singapore Changi Airport rising to become one of the busiest airports in the world, I think SIA Engineering will have a bright future without much if any competition.
In my opinion, SIA Engineering’s MOAT is very strong.
My Opinion: Pass (Great!)
My Final Verdict: SIA Engineering
Below is how I’ve scored SIA Engineering.
| Metric | Weightage | Score |
|---|---|---|
| Debt to Equity Ratio | High (2) | 2 |
| Dividend Yield | Low (1) | 1 |
| Dividend payout ratio | Low (1) | 1 |
| EPS Growth Rate | Low (1) | 0.5 |
| High Return of Equity (ROE) | Low (1) | 0 |
| Acceptable Price-to-Book Ratio | Low (1) | 0 |
| MOAT | Very High (3) | 3 |
| Total | NA | 8 |
SIA Engineering has a final score of 7.5/10.
For the years 2021 to 2023, SIA Engineering has low EPS, a negative ROE, and no dividend payout. These unfavorable financial results occur only after 2019’s pandemic.
Today, SIA Engineering is growing rapidly and I personally think that SIA Engineering has an amazing Toll bridge MOAT which will probably help the company to grow even faster as Singapore’s economy grow, and as the aviation industry grow.
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".