Why Multi-Chem (SGX:AWZ) Remains a High-Conviction Growth-and-Income Play in 2025

Multi-Chem (SGX:AWZ) has long been a cornerstone of Singapore's chemical manufacturing sector, but its appeal in 2025 extends beyond its traditional strengths. With a compelling combination of sustained earnings per share (EPS) growth, a robust dividend yield, and strong insider confidence, the stock continues to attract investors seeking both capital appreciation and income. This analysis delves into the company's financial performance, dividend strategy, and insider sentiment to assess its long-term value proposition.

Sustained EPS Growth: A Foundation for Resilience

Multi-Chem's ability to deliver consistent earnings growth is a critical factor in its enduring appeal. For the financial year ended 31 December 2024, the company reported an EPS of S$0.34, up from S$0.30 in FY 2023. While the first half of 2025 saw a slight dip in EPS to S$0.16, this temporary setback does not overshadow its broader five-year growth trajectory. Over the past five years, Multi-Chem has achieved a 13% annualized EPS growth rate, supported by a return on equity (ROE) of 19%, significantly outpacing the industry average of 8.6%.

The company's high ROE underscores its efficient use of equity capital, a key driver of long-term profitability. Analysts note that this metric, combined with a payout ratio of 77% over the past three years, suggests a balance between rewarding shareholders and reinvesting in growth. While the first-half 2025 results hint at short-term volatility, the company's historical resilience and strong operational fundamentals position it to recover and sustain growth in the full year.

Dividend Performance: A Magnet for Income Investors

Multi-Chem's dividend yield of 7.44% places it in the top 25% of Singapore's dividend-paying stocks, making it a standout for income-focused investors. The company's dividend history reflects a growing trend, with annual payouts increasing over the past decade despite occasional volatility. For 2024, it announced a final tax-exempt dividend of S$0.11 per share, payable on 23 May 2025, while the first-half 2025 dividend was similarly set at S$0.11 per share.

The consistency of these payouts is underpinned by Multi-Chem's strong cash flow generation and disciplined capital allocation. A report by Simplywall St. highlights that the company's payout ratio remains sustainable, with 77% of profits distributed to shareholders over the past three years. This aligns with its "one-tier" dividend structure, which simplifies tax efficiency for investors. Furthermore, the company's five-year total shareholder return of 429% demonstrates its ability to deliver both income and capital gains, reinforcing its dual appeal as a growth-and-income play.

Insider Sentiment: A Barometer of Confidence

Insider transactions and ownership patterns provide critical insights into management's confidence in the company's future. As of December 2025, insiders hold over 82% of Multi-Chem's shares, with the CEO, Foo Suan Sai, owning 74.33 million shares. This level of ownership aligns management's interests with shareholders and signals long-term commitment.

Recent insider activity has been particularly telling. In October 2025, Foo purchased 32,785 shares at S$2.73 per share, and in December 2025, he acquired 79,941 shares at S$2.66 per share. These purchases, despite earlier sales in August 2024, reflect a strategic approach to capitalizing on price dips. Yahoo Finance notes that such insider buying "signals confidence in the company's future performance", particularly in a sector prone to cyclical fluctuations.

Moreover, the company's management changes, including the departure of Goh Tian Keong Winston as Key Management Personnel in July 2025, have not dented its operational stability. The CEO's continued active participation in the stock market and the collective ownership stake of top insiders underscore a unified vision for the company's growth.

Conclusion: A Compelling Case for Long-Term Value

Multi-Chem's combination of sustained EPS growth, a high-yield dividend strategy, and strong insider confidence makes it a rare gem in today's market. While short-term fluctuations, such as the first-half 2025 EPS dip, warrant caution, the company's long-term fundamentals remain robust. Its high ROE, disciplined payout ratio, and insider alignment with shareholders create a compelling case for investors seeking both income and capital appreciation.

For those with a long-term horizon, Multi-Chem offers a rare blend of stability and growth potential. As the company navigates 2025, its track record of delivering shareholder value-backed by management's visible confidence-positions it as a high-conviction play in Singapore's competitive equity landscape.