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Here are 3 Healthcare Companies That Are Trading Close To A 52 Week Low

One of the fastest growing industries in Singapore is the healthcare industry. There are numerous reasons for growth in this sector, including a longer life span coupled with ageing population.

In Singapore, there are many listed companies that are exposed to this sector; Raffles Medical Group Ltd. (SGX: BSL), IHH Healthcare Berhad (SGX: Q0F), Q & M Dental Group (Singapore) Limited (SGX: QC7), Singapore O&G Ltd (SGX: 41X), Health Management International Ltd. (SGX: 588) and Parkway Life REIT (SGX: C2PU).

Many of these companies are currently trading close to their 52-week low. Some of the bigger players like IHH healthcare, Raffles Medical, and Q&M Dental Group are among these companies.

As a value investor, one question that I have in mind is – which of these 3 companies would be considered to have the lowest valuation?

To answer the question, let’s take a look at 3 valuations metrics to compare the valuation of these 3 companies, namely price-to-book ratio, price-to-earnings ratio, and dividend yield.

Price To Book

Source: Reuters

Q&M has the highest price-to-book ratio, followed by Raffles Medical and IHH Healthcare. However, Q&M is trading at a premium of 32% and 104% respectively, as compared to Raffles Medical and IHH Healthcare.

 

Price To Earnings

Source: Reuters

IHH Healthcare has the highest price-to-earnings ratio, followed by Raffles Medical and Q&M Dental.  In relative terms, IHH Healthcare is trading at a premium of 66% and 195%, respectively, as compared to Raffles Medical and Q&M Dental.

Dividend Yield

Source: Reuters

Q&M Dental has the highest dividend yield, followed by Raffles Medical and IHH Healthcare.

Conclusion

Based on the above analysis, one might argue that Q&M Dental has the lowest valuation among the 3 companies as it has the lowest price to earnings ratio and the highest dividend yield. Yet, these three metrics should not be the only ones used in evaluating the attractiveness of a company. Investors should also look at other aspects, which include sustainability of income, growth, competitive advantage, the quality of a company’s management to make an informed judgement of the attractiveness of the stock.

 

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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. Motley Fool Singapore has a buy recommendation for Raffles Medical.