MENU

Thai Beverage Public Company Limited’s Stock Price Is Near A 52-Week High: Is It Expensive?

Thai Beverage Public Company Limited (SGX: Y92) is a Thailand-based food and beverage company that produces and distributes spirits, beer, snacks, and non-alcoholic beverages.

Right now, Thai Beverage’s stock price is at S$0.965, which is close to a 52-week high of S$0.99. This raises an important question: Is Thai Beverage expensive now?

Unfortunately, there is no easy answer since there are many ways to look at a company’s valuation. But, we can still get some insight by comparing Thai Beverage’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).

Thai Beverage currently has a PB ratio of 4.8, which is significantly higher than the SPDR STI ETF’s PB ratio of 1.3. This makes Thai Beverage nearly four times pricier than the market based on the PB ratio.

Similarly, Thai Beverage’s PE ratio is materially higher than that of the SPDR STI ETF’s (17.5 vs 11.4; this works out to the company’s PE ratio being over 60% higher).

Lastly, we have the dividend yield. This is where Thai Beverage holds its own. The company has a slightly lower dividend yield of 2.9% as compared to the market’s yield of 3.0%. The higher the yield is, the lower a stock’s valued.

In sum, we can argue that Thai Beverage is currently priced at a significant premium to the market given its much higher PB and PE ratios. Nevertheless, income investors may still be interested in the company since it has a dividend yield that is comparable to the market average.

If you like what you've seen, you can get even more investing insights and analyses from The Motley Fool's investing newsletter Take Stock Singapore. It's FREE, so do check it out here.

Also, like us on Facebook to follow our latest news and articles. The Motley Fool's purpose is to help the world invest, better.

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.