ComfortDelGro Corporation Ltd’s Stock Price Is Near A 52-Week Low: Is It Cheap Now?

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Land transport giant ComfortDelGro Corporation Ltd (SGX: C52) has operations in seven countries, and a total fleet size of 43,500 buses, taxis and rental vehicles. The countries it’s in include Singapore, China, the United Kingdom, Ireland, Australia, Vietnam, and Malaysia.

Over the last 12 months, ComfortDelGo’s shares have fallen by 15.7% to S$2.04 currently. This is near a 52-week low of S$1.96, which may raise an important question for investors: Is ComfortDelGro a cheap stock 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 ComfortDelGro’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).

ComfortDelGro currently has a PB ratio of 1.7, which is higher than the SPDR STI ETF’s PB ratio of 1.3. This makes ComfortDelGro 34% dearer than the market based on the PB ratio. Similarly, the company’s PE ratio is 27% higher than that of the SPDR STI ETF’s (14.0 vs 11.0).

On the other hand, Comfortdelgro has a high dividend yield of 5% when compared to the market’s yield of 3.0%. The lower the yield of a stock is, the higher it is valued. So, the land transport operator is currently trading at a 42% discount to the market, based on the dividend yield.

To sum it all up, we can argue that ComfortDelGro is currently priced at a premium to the market given its higher PB and PE ratios.

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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.