Singapore Press Holdings Limited (SGX: T39) is a publisher of newspapers such as The Straits Times, The Business Times, and The New Paper.
It is also in the real estate business and other activities like events management. As part of the firm’s real estate activities, it is the majority owner and manager of SPH REIT (SGX: SK6U), a real estate investment trust which owns retail malls mostly in Singapore.
At the current price of S$2.41 (at the time of writing), Singapore Press Holding’s shares are trading at 4% above its 52-week low price of S$2.31. This raises a question: Is Singapore Press Holding cheap now? This question is important because if the firm’s shares are cheap, it might be a good opportunity for investors.
Unfortunately, there is no easy answer. However, we can still get some insight by comparing Singapore Press Holding’s current valuations with the market’s valuation. The three valuation metrics I will focus on are the price-to-book (P/B) ratio, price-to-earnings (P/E) 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).
Singapore Press Holding currently has a P/B ratio of 1.1, which is comparable to the SPDR STI ETF’s P/B ratio of 1.1. In addition, the company’s dividend yield of 3.7% is marginally higher than the market’s yield of 3.5%. The higher a stock’s yield is, the lower is its valuation.
Yet, Singapore Press Holding’s P/E ratio is higher than that of the SPDR STI ETF’s (14.0 vs 12.8).
In sum, we can argue that Singapore Press Holding is priced fairly to the market average due to its high dividend yield, offset by its high PE ratio.
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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.