At the start of this year, I shortlisted ComfortDelGro (C52), or CDG, as one of the potential six stocks vying for the “podium” in 2026.
This wasn’t a blind pick — their aggressive international expansion initially caught my eye, leading me to reinvest in this land transport giant last July.
During that same period, I also increased my stake in its subsidiary, VICOM (WJP).
Since then, both have reported a strong set of results for 2H 2025.
FY 2025 Performance: CDG vs VICOM
Before I explain why I’m letting CDG go, it’s worth looking at the numbers that brought me here.
While the numbers highlight a stark difference in growth trajectories, we have to be objective: VICOM’s performance was heavily “supercharged” by the one-off OBU installation project (ERP 2.0), which is tapering off this year.
This means you will see a drop in VICOM’s revenue and net profits for FY 2026.
However, I have argued in an earlier post why I believe VICOM might be able to sustain its record S$0.084 dividend despite this “normalisation.”
With increasing sales, profits and dividends over the last year, I have zero complaints about their performance.
So why am I divesting CDG?
A Disliking of Conglomerates
There are plenty of “logical” reasons to be cautious about CDG right now.
We are seeing increasing local competition from the likes of Grab, the loss of major bus packages (like Tampines), and a rising debt level used to fund those aggressive overseas acquisitions.
Even the recent surge in oil prices (hitting US$90–$100 in March 2026) threatens to squeeze those transport margins further!
But if I’m honest, the real reason is simpler: Deep down, I don’t like investing in conglomerates.
There are simply too many moving parts across too many geographies to track effectively. When I can’t piece the parts together to get a coherent picture, it’s hard to build the conviction needed to stay vested for the long run.
Don’t get me wrong—conglomerates can do exceptionally well!
Look at ST Engineering (S63) with its massive defence and aerospace segments, or Boustead (F9D) with its diverse interests from geospatial tech to their brand new industrial REIT.
They have proven their worth over the years, but their broadly diversified nature is why I don’t own either of them.
The issue lies with me — a “simpleton” who prefers to analyse more straightforward business models. Since I already maintain a diversified portfolio, I’m looking for congruence within the individual businesses I own.
I prefer to see all segments naturally related and pulling in the same direction, rather than interests scattered across unrelated industries.
For me, conviction comes from that clarity. This is why I’m shifting my focus toward a different set of opportunities.
A Liking of Simpler Business Models
The trigger for this move actually came from wanting to increase my stake in VICOM.
While I recently raised cash by divesting UOB, I am using those proceeds to add to DBS (D05), HRnetGroup (CHZ), iFAST (AIY), Parkway Life REIT(C2PU) and Food Empire (F03).
In fact, with the exception of Food Empire, I bought my first tranche of these on Friday.
As you can see from these stocks, their businesses are easier to understand at the “big picture” level. To be clear: they are still complex, but their segments are more interconnected, driving the overall direction of the company in a focused way.
And if their long-term growth trajectories make sense to me, I’m more able to tolerate the short-term price volatility.
Trading Yield for Potential Long-Term Growth
I will be divesting CDG completely in the coming week. Part of the proceeds will flow into VICOM, while the rest will be deployed into Food Empire across three tranches along the year.
At current prices, CDG’s nearly 6% yield is hard to ignore. By divesting now, I’m bracing for a ‘dividend double whammy’ this season.
Not only am I moving into other stocks with lower yields, but because I am buying in tranches, I won’t have my full deployment in time for the April/May XD dates.
This means my total dividend collection will likely be lower this year. It’s a trade-off I’m willing to take for potentially better long-term return.
This decision isn’t so much a doubt of CDG’s performance, but an alignment with my personal preference for business simplicity.
All the best to those of you staying the course with the land transport giant!
Who’s leading in the Race?
Here’s a brief update on the race to the podium.
The dark horse, AEM (AWX), has certainly lived up to its label, leaving the rest of the pack in the dust with a staggering +95% return!
My other semiconductor play, UMS (558), is also showing strong pace. Despite a muted 2H 2025, its guidance for a robust FY 2026 is clearly catching the market’s attention.
Meanwhile, the other four competitors are currently struggling — not necessarily in their business fundamentals, but in terms of market sentiment and shifting expectations.
With such a dominant lead, AEM looks like the favourite to win. However, in a 10km run, we are only just approaching the 2.5km mark. Plenty can change in the next three quarters.
Even if my original candidates stumble, other competitors like Food Empire and Micro-Mechanics (5DD) are giving chase.
I’ll shed more light into these “chasers” when reviewing my portfolio 1Q performance at the end of the month.
Stay tuned!
Related Posts
Why I Divested UOB (Instead of Venture) to Buy These 5 Stocks
Can VICOM Sustain its Record 8.4-cent Dividend?
Looking to Cut Cost? Try these 3 Singapore Transportation Stocks
Referral
These are the platforms and services I used. If you decide to use any of the following platforms, do consider using my referral links.
FSMOne account (P0003528): My main brokerage account
StocksCafe (TFI): The web-based app I used to track portfolio returns and dividends.
Keppel Electric (REFER001): The Open Electricity Market supplier I used for lower electric tariffs.
Disclaimer
This content is for informational only. I am not a financial advisor, tax professional, or legal expert, and the information shared here does not constitute personalised financial advice, nor is it a solicitation to buy or sell any securities or financial instruments.
All opinions and commentary reflect my personal views and are based on general market commentary.
You are solely responsible for your own financial decisions. Investing involves risk, and any action you take based on the information provided on this blog or channel is strictly at your own risk.
Always conduct your own research and due diligence and consult with a qualified, licensed financial professional, tax professional, or legal advisor before making any investment or financial decision.