These 6 Singapore Companies Are Value Stocks That Belong To The FTSE Value-Stocks ASEAN Index

There are 12 Singapore-listed stocks which are in the FTSE Value-Stocks ASEAN Index.

The objective of the index is to identify quality and overlooked value stocks that are listed in ASEAN stock exchanges. The index vets stocks using a proprietary value screening process which includes valuation, quality, and contrarian factors.

In the valuation group are things such as a stock’s price-to-earnings (PE) ratio and dividend yield. The quality factors include a stock’s return on equity, operating profit margin, and net gearing.

With help from a handy report, let’s have a look at six of the 12 Singapore stocks that have made the list into the FTSE Value-Stocks ASEAN Index (figures as of 14 June 2016, unless otherwise stated):

  1. Singapore Telecommunications Limited (SGX: Z74), at a market capitalisation of $60.6 billion, is the largest company to make the list. The telco sports a dividend yield of 4.6% and has a PE ratio of 15.6, which is below its five-year average PE ratio of 16.3. Over the past five years, Singtel has generated 60% in total returns.
  2. On the other end of the size-spectrum is CDL Hospitality Trusts  (SGX: J85), a stapled trust with a $1.4 billion market cap. CDL Hospitality Trusts offers a distribution yield of 7.5%. It also has a price-to-book (PB) ratio of 0.9, right smack at where its five-year average PB ratio is. Unfortunately, units of the stapled trust have underwhelmed over the past five years, logging in negative total returns.
  3. DBS Group Holdings Ltd (SGX: D05), Singapore’s largest bank by assets and a leading Asian financial services group, weighs in with a 3.9% dividend yield. At a PB ratio of 0.9, the bank is trading below its five-year average PB ratio of 1.1. Over the past five years, DBS Group Holdings has generated a respectable 29% in total returns. The bank is also a sizeable stock with its market capitalisation of $39.2 billion; it is the second largest Singapore stock to make the cut for the FTSE Value-Stocks ASEAN Index.
  4. Venture Corporation Ltd (SGX: V03) is also in the list. The electronics manufacturing services (EMS) provider offers a 5.9% dividend yield and is currently trading at a PE ratio of 14.8. This is below its five-year average PE ratio of 22.6. Like DBS Group Holdings, Venture Corporation has churned out respectable returns over the last five years, clocking in total returns of 33%.
  5. Oversea-Chinese Banking Corp Limited (SGX: O39) is another bank in the list. OCBC offers a higher yield compared to DBS Group Holdings at 4.3%. But, its total returns over the last five years, at 12%, have lagged DBS Group’s. OCBC is trading at a PB ratio of 1, which is below its five-year average PB ratio of 1.2.
  6. A real estate investment trust (REIT) in the value index would be Mapletree Logistics Trust (SGX: M44U). The REIT offers a distribution yield of 7.3%. Over the past five years, Mapletree Logistics Trust has clocked in a total return of 50%. It trades at a PB ratio of 1.1, which is lower than its five-year average PB ratio of 1.2.

Looking at financial metrics is one part of the equation when it comes to investing as it can help us separate the wheat from the chaff. But it’s not the only thing to do – digging further into the qualitative aspects of a company’s business could be the next step for the Foolish investor.

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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 Chin Hui Leong owns units in Mapletree Logistics Trust.