Confidence in Keppel Corp and SembCorp

Since oil prices were declining, Keppel Corp, SembCorp Industries and SembCorp Marine took a major hit in terms of their share prices.

Counter 52-week Low 52-week High Current Price Change
Keppel Corp $8.41 $11.27 $8.44 – 25.1%
SembCorp Ind $4.17 $5.59 $4.20 – 24.8
SembCorp Marine $2.90 $4.46 $2.91 – 34.7

Note: Current share price is based on 3 December 2014. Change is between 52-week high share price and current price.

Comparing latest Net Asset Value against current share price:

Counter Net Asset Value Current Price Price-to-Book
Keppel Corp $5.53 $8.44 1.52
SembCorp Ind $3.02 $4.20 1.39
SembCorp Marine $1.33 $2.91 2.18

SembCorp Industries had lowest Price-to-book ratio followed by Keppel Corp.

Looking at most recent historical dividend yield (Final Dividend + Special or Bonus Dividend + Interim Dividend):

Counter Final Special/Bonus Interim Dividend Yield
Keppel Corp $0.30 0 0.12 4.97%
SembCorp Ind 0.15 0.02 0.05 5.23
SembCorp Marine 0.06 0.02 0.05 4.46

Historical dividend yield is calculated based on current share price of 3 December 2014. The dividend yields of all three corporations were good before.

How are these corporations doing for the 9 months ended 30 September 2014? Net profits for 9 months are compared between this year’s and last year’s results.

Counter Net Profit (Current) Net Profit (Previous) Change
Keppel Corp $1,158m 1,161m – 0.2
SembCorp Ind 560m 596m – 6.1
SembCorp Marine 386m 373m + 3.4

Share prices had dropped significantly from 52-week high prices, about 25% to 35% down. See first table above.

How confident are we to take up these stocks after the beating and keep them for long term investments? What are their order books like for the next few years? What will be the final one-year results for these corporations at end of 2014? This has impact on final dividend to be declared at year end.

Copyright © 2014, limkimtong for Living Investment

The material presented is intended to be general and written in layman’s language as much as it is possible. The author shall not be liable for any direct or consequential loss arising from any use of material written. Please seek professional advice from your financial advisor or financial institutions on material written covering financial matters.

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