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ComfortDelGro Corporation Ltd Stock Is Near A 52-Week Low Now, But Is It Actually Cheap?

ComfortDelgro Corporation Ltd (SGX: C52) is one of the largest land transport companies in the world with a fleet of around 45,000 vehicles.

Right now, ComfortDelGro’s stock is trading at S$2.35, which is just above a 52-week low of S$2.33. But is the stock cheap?

That’s not an easy question to answer since there are many different ways to look at a company’s value. This being said, we can still gain some insight by comparing ComfortDelGro’s current valuations with the market.

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).

At ComfortDelGro’s current price, it has a PB ratio of 1.9, which is around 60% higher than the SPDR STI ETF’s PB ratio of 1.2.

Meanwhile, the land transport company has a PE ratio of 15.5, which is slightly higher than the SPDR STI ETF’s earnings multiple of 13.

Lastly, for the dividend yield, ComfortDelGro has a trailing yield of 4.4%, which turns out to be more attractive than the market’s yield of 2.9%.

To sum things up, ComfortDelGro can be said to be more expensive than the market given its higher PB and PE ratios. But it’s worth repeating that a deeper look at ComfortDelGro’s business is needed before any firm investing conclusion can be reached. Valuations are only one piece of the puzzle – and like I mentioned earlier, there are many other approaches to value a company beyond what I’ve shared above.

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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.