Is the Market Following Strong Financials?

Most readers would already know that Singapore Airlines’ (SGX:C6L) stock increased by 1.4% over the past week. Given its impressive performance, we decided to study the company’s key financial indicators as a company’s long-term fundamentals usually dictate market outcomes. Particularly, we will be paying attention to Singapore Airlines’ ROE today.

Return on Equity or ROE is a test of how effectively a company is growing its value and managing investors’ money. Simply put, it is used to assess the profitability of a company in relation to its equity capital.

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The formula for ROE is:

Return on Equity = Net Profit (from continuing operations) ÷ Shareholders’ Equity

So, based on the above formula, the ROE for Singapore Airlines is:

15% = S$2.3b ÷ S$16b (Based on the trailing twelve months to September 2025).

The ‘return’ is the profit over the last twelve months. So, this means that for every SGD1 of its shareholder’s investments, the company generates a profit of SGD0.15.

past-earnings-growth — SGX:C6L Past Earnings Growth December 26th 2025

Earnings growth is an important metric to consider when valuing a stock. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. By doing so, they will have an idea if the stock is headed into clear blue waters or if swampy waters await. If you’re wondering about Singapore Airlines”s valuation, check out this gauge of its price-to-earnings ratio, as compared to its industry.

The high three-year median payout ratio of 76% (implying that it keeps only 24% of profits) for Singapore Airlines suggests that the company’s growth wasn’t really hampered despite it returning most of the earnings to its shareholders.

Besides, Singapore Airlines has been paying dividends for at least ten years or more. This shows that the company is committed to sharing profits with its shareholders. Based on the latest analysts’ estimates, we found that the company’s future payout ratio over the next three years is expected to hold steady at 66%. Still, forecasts suggest that Singapore Airlines’ future ROE will drop to 6.6% even though the the company’s payout ratio is not expected to change by much.

In total, we are pretty happy with Singapore Airlines’ performance. We are particularly impressed by the considerable earnings growth posted by the company, which was likely backed by its high ROE. While the company is paying out most of its earnings as dividends, it has been able to grow its earnings in spite of it, so that’s probably a good sign. With that said, on studying the latest analyst forecasts, we found that while the company has seen growth in its past earnings, analysts expect its future earnings to shrink. To know more about the latest analysts predictions for the company, check out this visualization of analyst forecasts for the company.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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