In her second book “Show me the money, The Science of stock-picking”, Teh Hooi Ling mentioned that buying stocks with the highest dividend yield, but lowest Price-to-Book (PTB) ratio appears to be a winning strategy over a longer period.
There can be stocks that are trading with low Price-to-Book (PTB) ratio and at the same time had a strong dividend yield percentage. These stocks I am tracking had good brand names. (Note: This list is not exhaustive.)
|Counter||Share price ($) at 14 Aug||PTB||Dividend Yield (%)||DY/PTB|
|* Cum Dividend|
Note: Data are extracted from StockFacts of SGX web site.
The last column “DY/PTB” is a calculated number after taking dividend yield (%) divided by Price-to-Book ratio (number of times). The table is sorted by this number from the highest to the lowest.
Of interest were M1, SGX and StarHub had high Price-to-Book ratios. It was not unusual based on past data. These stocks had good dividend yields. DY/PTB for these stocks were below 1.00 because of big denominators.
Looking at top 7 counters, share prices of Keppel Corp, Sembcorp Industries and Sembcorp Marine were affected adversely by the collapse of oil prices. As a result, dividend yields were high. DY/PTB is high.
All the banks, UOB, OCBC and DBS, are in this top 7. The 7th is SIA.
Disclaimer: Caution is advised with regard to using the above information for investing.
Copyright © 2015, limkimtong for Living Investment
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