TalkMed Group Limited (SGX: 5G3) is a healthcare company providing medical oncology and palliative care healthcare services in Singapore.
At their current price of S$0.53 (at the time of writing), Talkmed’s shares are down 24% from their 52-week high price of S$0.70. Is Talkmed cheap now? If shares are cheap, it might be a good opportunity for investors.
There is no easy answer, but we can get some insight by comparing Talkmed’s current valuation to the market’s valuation. We’ll use three common valuation metrics: 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).
Talkmed currently has a P/B ratio of 9.4, which is significantly higher than the SPDR STI ETF’s P/B ratio of 1.2. Also, its P/E ratio is higher than that of the SPDR STI ETF (23.7 vs. 12.3).
On the other hand, the company’s dividend yield of 3.5% is comparable to the market’s yield of 3.5%. The higher a stock’s yield, the lower its valuation.
Talkmed looks to be priced at a premium to the market average due to its high P/B and P/E ratios. Nevertheless, income investors might still be attracted to the company because of its reasonably high 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.