Could Fraser & Neave Limited Shine As A Value Diversified Industrials Stock?

Fraser & Neave F&NDiversified Industrials are defined as industrial companies that are engaged in at least three substantially different classes of business within the industrial industry. The Singapore Stock Exchange lists nine such companies.

The two largest stocks by a country mile – accounting for nearly 90% of the total market capitalisation of diversified industrials – are Jardine Matheson Holdings Limited (SGX: J36) and Jardine Strategic Holdings Limited (SGX: J37).

But whilst they blow the rest out the water in terms of size, do they have what it takes to be a value share?

Both companies are valued slightly below the market average Price-to-Earnings ratio. Jardine Strategic looks slightly better with a ratio of 12.6 versus Jardine Matheson’s PE of 13.7.

However neither have particularly strong dividend yields. Jardine Matheson yields 2.4%, while Jardine Strategic only yields 0.7%. Meanwhile, neither Jardine Matheson’s price-to-book of 1.3 nor Jardine Strategic’s price-to-book of 1 looks particularly appealing.

Fraser & Neave (SGX: F99) looks slightly better, though its fairly high price to book ratio of 1.9 might be a little off-putting. The company is involved in a broad spectrum of businesses, including the publishing, printing and distributing of books, distribution of lifestyle accessories and, of course, the production and selling of beverages.

F&N trades at around five times earnings which is less than half of the market average. It also sports a dividend yield of 5.2%, which is greater than both Jardine Matheson and Jardine Strategic.

Karin Technology Holdings Limited (SGX: K29). The company provides electronic components, integrated circuit (IC) software and IT infrastructure solutions primarily in Hong Kong and China.

Karin’s earnings multiple is less appealing than F&N. It trades at 10 times earnings. But this could be more than compensated for by a huge dividend yield of 10% and a price to book ratio of just 0.7.

However, with a market capitalisation of around only one-seventieth of F&N, Karin might be a tad risky option for some.

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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 Adam Kuo doesn’t own shares in any companies mentioned.