QAF Limited’s Stock Price Is At A 52-Week Low Now: Is It Cheap?

QAF Limited (SGX: Q01)  is a food production company. Its business activities include bakery operations, pork production, food processing and distribution, feed milling, food trading and distribution, food manufacturing, wine distribution, and the ownership and leasing of warehouses.

Some of the more prominent consumer food brands the company has in its portfolio are GardeniaCowhead, and Farmland.Right now, QAF is trading at S$1.11, which is at a 52-week low. This raises an important question: Is QAF’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 QAF’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).

QAF currently has a PB ratio of 1.2, which is slightly lower than the SPDR STI ETF’s PB ratio of 1.3. The PE ratio also has a similar dynamic, as QAF is cheaper than the SPDR STI ETF (PE ratios of 7.3 vs. 11.2). When it comes to the dividend yield, QAF has the upper hand as well. The company has a dividend yield of 4.5%, which is higher than the market’s yield of 2.9%. The higher the yield is, the lower a stock’s valued.

In sum, we can argue that QAF is currently priced at a discount to the market, given its lower PB and PE ratios, and higher 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.