The FTSE Value-Stocks ASEAN Index uses a proprietary screen to identify value stocks from ASEAN.
The index uses a criterion which looks at valuation, quality factors, and contrarian factors. On the valuation front, the index uses the price-to-earnings (PE) ratio as its main selection determinant. Once all the companies that fit into its screening criteria are selected and ranked, the 50 companies with the lowest PE ratios are selected for the index.
SGX recently released a report, looking at the performance of the 10 Singapore companies included in the index. Let’s have a look at five of them (figures as of 13 Aug 2018, unless otherwise stated):
1. Ascendas Real Estate Investment Trust (SGX: A17U) is the one of three real estate investment trusts that made the cut into the index. Ascendas REIT is an owner and manager of industrial properties located in Singapore, UK and Australia. The REIT offers a distribution yield of 5.8%, and trades at a price to book (PB) ratio of 1.3. Over the past ten years, Ascendas REIT has returned a sizable 120% in total returns.
2. Next up is ComfortDelGro Corporation Limited (SGX:C52), one of the largest land transport companies in the world. ComfortGelGro trads at 18.9 times earnings. The transport giant also pays a respectable dividend coming in at 4.4%. ComfortDelGro produced a respectable total return of 116% over the last decade.
3. DBS Group Holdings Ltd (SGX: D05), ASEAN’s largest bank, is also the largest Singapore constituent in the index. DBS trades at a PB ratio of 1.4. Over the past ten years, DBS Group Holdings generated a sizable 140% in total returns, and sports a dividend yield of 4.7%.
4. Jardine Cycle & Carriage Limited (SGX: C07) was also included in the index. Jardine C&C is a conglomerate with varied business interests, including automotive, cement, dairy, and electrical engineering. Shares trade at a PE ratio of 17.3. Over the past decade, the company has rewarded patient investors with a total return of approaching 180%. Jardine C&C also pays a dividend of 3.5%.
5. Mapletree Industrial Trust (SGX: ME8U) rounds up the first five Singapore companies on the index. Interestingly, Mapletree Industrials was the best performer on the list with a total return of almost 260% over the past ten years. The real estate investment trust (REIT) owns and manages industrial properties in Singapore. Units of the REIT are changing hands at a price-to-book (PB) value of 1.3. The REIT also offers an attractive distribution yield of 6%.
The five companies presented above that winning stocks can comes from a wide range of industries. As Foolish investors, we should be focusing on finding the best companies within each industry. We can do so by digging deeper into each companies to understand what makes them special, and what gives them an edge over other competitors.
If we are right in our assessment, we should have the patience to reap the long-term rewards that follow.
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The Motley Fool Singapore contributor Esjay contributed to this article.
The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.The Motley Fool Singapore has recommended shares of Singapore Exchange, Mapletree Industrial Trust, and DBS Group. Motley Fool Singapore writer Chin Hui Leong owns shares in Singapore Exchange. Motley Fool Singapore contributor Esjay does not own any of the shares mentioned.