Saturday, July 8, 2017


Dear readers, when it comes to investing, investors seek value and would like to invest in a stock which is undervalued that is having a Price-to-Book ratio (P/B) of less than 1. At the same time, income investors seek to achieve a passive income stream through dividends, hence income investors seek to invest in high dividends stock. So when it comes to a convergence of both the above camps, I believe Singapore stocks which are undervalued and which offer a dividends yields of more than 5% fully satisfy both investing camps.

On the Singapore stocks markets, there are currently 50 Singapore stocks which are both undervalued and which offer a dividend yield of more than 5%. With such a selection, how do we ensure which of these stocks offer the best value taking into consideration dividend yields and P/B ratio?

A method which I have learnt before and which I think make perfect sense is to use this ratio of: Dividends Yields/ Price-to-Book. As investors want both high dividends yield and as undervalued a stock as possible, clearly this ratio let us just call it DPB should be as high as possible. So I rank the top 20 Singapore stocks with the largest DPB ratio as below:

1) Broadway Industrial Group Limited 1.03
2) Falcon Energy Group Limited 0.82
3) Karin Technology Holdings Limited 0.25
4) Global Testing Corporation Limited 0.21
5) Pan Hong Holdings Group Limited 0.18
6) Asian Pay Television Trust 0.17
7) Willas-Array Electronics (Holdings) Limited 0.14 8) Advanced Holdings Ltd. 0.14
9) Global Investments Limited 0.13
10) Thakral Corporation Ltd 0.13
11) Sabana Shari'ah Compliant Industrial Real Estate Investment Trust 0.12
12) Hutchison Port Holdings Trust 0.12
13) AF Global Limited 0.11
14) OUE Commercial Real Estate Investment Trust 0.11
15) Accordia Golf Trust 0.11
16) CWG International Ltd. 0.10
17) Parkson Retail Asia Limited 0.10
18) Tye Soon Limited 0.10
19) Hotung Investment Holdings Limited 0.10
20) Miyoshi Limited 0.10

The above list has to be read taking into view that not all stocks pay dividends yearly (e.g. Broadway stock) and some of the above stocks pay a special high dividends which might have inflated the ratio. And some of the dividends data would have be due to past dividends paid (e.g. Falcon stock has stopped paying dividends since year 2015). It is with this in mind, that I believe when we filter stocks based on certain criteria, we have to do a diligence once again to look through the filtered stocks one by one. For example, in view of the dividends status of the top two stocks in the list, Karin Technology stock which has a dividend yield on record of 12.6% (it has been paying stocks yearly) and a valuation of 0.511 seems to be attractive to investors indeed.

But really, the above are just based on two investing criteria; investors might want to weigh in factors like debt-to-equity ratio for a more comprehensive analysis. Join the emailing list to receive regular Financial and Singapore stocks newsletters too! Like" me on Singapore Stocks Investing Facebook page to receive all posts on your Facebook as well as read more articles. Follow me on Twitter too.

Related Posts Plugin for WordPress, Blogger...

Popular Posts

Total Pageviews