Jardine Cycle & Carriage Ltd Is Near A 52-Week Low Now: Is It Cheap?

Jardine Cycle & Carriage Ltd (SGX: C07) is a conglomerate with diverse business segments, including automotive, financial services, heavy equipment and mining, agribusiness, information technology, and infrastructure, logistics and others. The company’s main geographical market is Indonesia.

Over the last six months, Jardine Cycle & Carriage’s stock price has fallen by 10% to S$40.65 currently. That’s near a 52-week low of S$38.00. This raises an important question: Is Jardine Cycle & Carriage’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 Jardine Cycle & Carriage’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).

Jardine Cycle & Carriage currently has a PB ratio of 1.94, which is significantly higher than the SPDR STI ETF’s PB ratio of 1.25. This makes Jardine Cycle & Carriage pricier than the market based on the PB ratio. Similarly, Jardine Cycle & Carriage’s PE ratio is also higher than that of the SPDR STI ETF’s (15.1 vs 11.3).

In terms of the dividend yield, the Indonesia-focused conglomerate loses out too. At the moment, Jardine Cycle & Carriage has a dividend yield of just 2.5%, which is lower than the market’s yield of 3.0%. (The higher the yield is, the lower a stock’s valued.)

To sum it up, we can argue that Jardine Cycle & Carriage is currently priced at a premium to the market given its higher PB and PE ratios, and lower dividend yield. But, the company may still be be a good long-term investment opportunity as long as its future business prospects remain sound.

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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.