Singapore Markets closed

Singapore Press Holdings Limited’s Stock Price Is Down By 25% In The Last 12 Months: Is It A Bargain Now?

Lawrence Nga

Singapore Press Holdings Limited (SGX: T39) is a publisher of major newspapers in Singapore such as The Straits Times, The Business Times, Berita Harian, and more.

The company is also in the real estate business and is involved with other activities such as events management. As part of Singapore Press Holdings’ real estate activities, it is the majority owner and manager of SPH REIT (SGX: SK6U), a real estate investment trust which owns retail malls in Singapore.

Over the last 12 months, Singapore Press Holdings’ stock price has fallen by 25% to S$2.67. The magnitude of the decline may raise a question for investors: Is Singapore Press Holdings a bargain stock now?

Unfortunately, there is no easy answer. But, we can still get some insight by comparing Singapore Press Holdings’ 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 Press Holdings currently has a PB ratio of 1.2, which is slightly cheaper than the SPDR STI ETF’s PB ratio of 1.3.

In addition, Singapore Press Holdings has a higher dividend yield than the market (5.6% vs 2.9%). Since the lower a stock’s yield is, the higher is its valuation, Singapore Press Holdings is trading at a discount to the market based on the dividend yield.

But, Singapore Press Holdings’ PE ratio of 12.5 is higher than that of the SPDR STI ETF’s 11.1.

Putting it all together, we can argue that Singapore Press Holding is slightly cheaper than the market, due to its lower PB ratio and higher dividend yield.

More reading

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.