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Singapore O&G Ltd’s Stock Is Near A 52-Week Low Now: Is It A Bargain?

Lawrence Nga

Singapore O&G Ltd  (SGX: 1D8) is a healthcare services provider that was listed in June 2015. It has three main operating business segments at the moment, namely, Obstetrics and Gynaecology, Cancer-related, and Dermatology; its fourth arm focusing on paediatrics was set up in early 2016.

Currently, Singapore O&G’s stock price of S$0.41 is a 52-week low. This may raise a question among investors: Is Singapore O&G a bargain now?

Unfortunately, there is no easy answer. But, we can still get some insight by comparing Singapore O&G’s current valuations with the market’s. The three valuation metrics I will focus on are the price-to-book (PB) ratio, price-to-earnings (PE) ratio, and dividend yield.

I will be using the SPDR STI ETF (SGX: ES3) as a proxy for the market; the SPDR STI ETF is an exchange-traded fund that tracks the fundamentals of Singapore’s stock market benchmark, the Straits Times Index (SGX: ^STI).

Singapore O&G currently has a PB ratio of 4.7, which is higher than the SPDR STI ETF’s PB ratio of 1.35. This makes Singapore O&G dearer than the market based on the PB ratio. In addition, the healthcare services provider has a PE ratio that is nearly double that of the SPDR STI ETF’s (23.0 vs 11.65). On the other hand, Singapore O&G has a dividend yield of 3.7%, which is slightly higher than the market’s yield of 2.82%. The higher a stock’s yield is, the lower is its valuation.

Putting it all together, we can see that Singapore O&G is pricier than the market, given its higher PB and PE ratios.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Lawrence Nga doesn't own shares in any companies mentioned.