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Wilmar International Limited Is Near A 52-Week Low Now: Is It Cheap?

Wilmar International Limited (SGX: F34) is a leading agribusiness group in Asia. It operates through three main segments: Tropical Oils; Oilseeds and Grains; and Sugar.

Over the last six months, Wilmar’s stock price has fallen by 11% to S$3.17 currently. That’s near a 52-week low of S$3.08. This raises an important question: Is Wilmar’s stock actually cheap?

There’s no easy answer since there are many ways to look at a company’s valuation. But, we can still get some insight by comparing Wilmar’s current valuations with the market’s.

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).

Wilmar currently has a PB ratio of 0.97, which is lower than the SPDR STI ETF’s PB ratio of 1.24. This makes Wilmar cheaper than the market based on the PB ratio. Similarly, Wilmar’s PE ratio is also lower than that of the SPDR STI ETF’s (10.8 vs 11.1).

But when it comes to the dividend yield, Wilmar loses out. At the moment, the agribusiness giant has a dividend yield of just 2.0%, which is lower than the market’s yield of 3.1%. (The higher the yield is, the lower a stock’s valued.)

To sum it up, we can argue that Wilmar is currently priced at a discount to the market given its lower PB and PB ratios. Yet, some income investors may find Wilmar unattractive given its low dividend yield.

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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.