One of the most hated groups of stocks by the market right now are the telcos. Over the last six months, the three operational telcos in Singapore, Singapore Telecommunications Limited (SGX: Z74), StarHub Ltd (SGX: CC3), and M1 Ltd (SGX: B2F), have all seen their share prices fall hard.
Source: S&P Global Market Intelligence
Given the fall in the telcos’ stock prices, I thought it will be interesting to look at which of the three has the lowest valuation at the moment. There is no quick answer, but we can still get some insight by comparing the following valuation metrics of the three companies: Their price-to-book (PB) ratios; their price-to-earnings (PE) ratios; and their dividend yields.
Here’s a table showing the valuation numbers for Singtel, StarHub, and M1:
Source: SGX Stock Facts
With the data, we can see that there is no clear winner for this exercise. The trio have similar PE ratios, and Singtel has the most attractive PB ratio as well as the least attractive dividend yield.
One thing’s clear though. The three telcos may excite income investors given their high dividend yields. For context, the SPDR STI ETF (SGX: ES3) has a yield of around 3% at the moment; the SPDR STI ETF is an exchange-traded fund that tracks the fundamentals of Singapore’s market barometer, the Straits Times Index (SGX: ^STI). Of the three telcos, I am most comfortable with Singtel’s dividend. For why I’m wary of StarHub and M1’s dividends, you can check out here and here.
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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.