Over the last 5 years, ST Engineering has only provided its shareholders with a 10% capital gain! That's really a miserable return compared to STI's 20% gain over the same period which is almost double of STE!

One may argue that STE pays better dividends, but its only slightly better at around 4% while the index paid close to 3%. If we take a simple maths of 1% extra dividends over 5 years, that 5% extra still didn't help the STE to beat the index. STE still under performed the index by roughly 5% during the 5 year cycle.

So what was wrong?
Well lets take another look at STE using the 4 M approach (taken from Phil Town's Rule #1, an amazing book for all new investors)

Meaning
- STI Component
- Government Backed
- Widely Covered by Analysts
Moat
- Solid Defense Industry
- High Barrier of Entry
......