Before KeppelCorp, I have bought 10 lots of Hong Leong Finance (HLF) using my CPF OA monies. This was in 2015.
My reason for buying HLF is because of the dividends. The dividend was 12 cents for many years when it dropped to 10 cents for 2015 and 2016.
Nonetheless, at an entry price of 2.28 a share, 0.10 dividend is around 4.39%. This is higher than the 3.5% (2.5% base interest and 1% extra interest on the 1st 20k in OA) that CPF could offer. I am positive HLF can maintain this yield.
2nd reason for buying HLF - I can't afford to buy local banks' shares. This is the closest to a bank (actually it is a finance company). It is sitting on a billion dollar cash. This is definitely enough for the company to weather through many years of tough times.
3rd reason: The share is hovering below its NAV. This provides me with a margin of safety.
4th reason: It has been around in SG for many years and has weathered through many economic downturns and recessions. It has an established track record.
In recent years, the revenue and profits of the company have declined as interest rates remain low sonce 2008. But as interest is set to rise, the company is expected to reap higher revenue and profits.
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