UOL Group Limited (SGX: U14) is a Singapore-listed property company with S$20 billion of assets under management. The property group has is spread across many aspects of the property market such as property development, property investments and hotels operations.
Some of the notable properties in its portfolio include Novena Square, United Square, and Odeon Towers.
Between 1 Jan and 31 Dec 2018, UOL’s total return, which includes reinvested dividends has lagged the STI index (SGX: ^STI), with the former dropping 28.8%, while the latter fell 6.5%.
Is UOL a bargain at current prices? For this, the price to earnings (P/E) ratio, the price-to-book (P/B) ratio, the dividend yield and the net debt-to-equity ratio could provide some useful clues.
The real estate conglomerate has a trailing twelve months (TTM) earnings per share of S$0.46. UOL’s current share price stands at S$6.63, which equates to a P/E ratio of 14.4. That is higher than its one-year historical PE ratio of 5.93. Investors, however, should note that UOL’s EPS in the previous year was boosted by one-off gains.
At the end of the third quarter of 2018, UOL reported a net tangible asset value of S$11.24. This implies a P/B ratio of 0.59 at current prices. This means that investors are paying only S$0.59 for S$1 worth of assets. That looks cheap
At end September 2018, UOL had net debt of S$3.97 billion, while total equity stood at S$14.4billion, resulting in a net debt-to-equity ratio of 0.28. Over past its four-year (2014-2017), the real estate conglomerate’s net debt to equity ratio has been between 0.21 and 0.34. This indicates that its current net debt to equity ratio is in the middle of its historical range.
Lastly, UOL’s dividend has been increasing over the last four years moving from S$0.15 at 2014 to S$0.175 in 2017. Assuming the company pays out a dividend at the same rate as 2017 this would lead to a yield of 2.6% at current prices.
Looking at the four metrics, investors can see that UOL is attractively valued based on its P/B ratio. Its mid-range net debt to equity ratio suggests a good balance sheet. And with a 2.6% dividend, UOL might be a company to consider.
But this should only be a starting point for further evaluation.
The Motley Fool Singapore writer Esjay contributed to this article. Esjay does not own shares in UOL Group.
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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 Director David Kuo doesn’t own shares in any companies mentioned.