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There Are 2 Telco Stocks In Singapore That Have Fallen At Least 23% In The Last 3 Months – How Do Their Valuations Look Like Now?

There are currently three companies providing telecommunications services in Singapore and they are namely Singapore Telecommunications Limited (SGX: Z74), StarHub Ltd (SGX: CC3), and M1 Ltd (SGX: B2F).

The latter duo have seen their share prices fall by at least 23% each over the last three months.

telco-share-price-decline-table
Source: S&P Global Market Intelligence

I thought it’d be interesting to have a look at the valuations of StarHub and M1 and compare them with the market’s valuation.

The valuation metrics I’d be looking at are the price-to-earnings (PE) ratio, price-to-book (PB) ratio, and dividend yield. The market will be represented by the SPDR STI ETF (SGX: ES3), an exchange-traded fund that tracks the fundamentals of the Straits Times Index (SGX: ^STI).

telco-valuation-table
Source: SGX Stock Facts and the SPDR STI ETF’s website

We can see that the two telcos generally have higher PE and PB ratios than the market. But, they do have much fatter dividend yields.

A Foolish conclusion

While an overview of how the telcos’ valuation metrics compare against the market’s is insightful, the data should only be used as a starting point for further research.

After all, there are many aspects of a company that investors should consider beyond valuation metrics. Valuation work cannot be effectively conducted without a good understanding of a company’s underlying business activities.

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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.