Dear readers, in this post, I am going to share the ten most attractive Straits Times Index (STI) stocks on the Singapore Stocks Exchange. To do so, I have used a metric called the normalized dividend yield based on a fully-valued basis. To illustrate what the above metric means, take for example a stock trading at 6% dividend yield that has a price-to-book ratio of 0.50. What this means is that based on a fully-valued basis (price-to-book ratio of 1), the normalized dividend yield is 6% dividend by 0.50 which is equal to 12%.
Without further ado, let us take a look at the ten most attractive Straits Times Index (STI) stocks based on the normalized dividend yields as below (as of 18 May 2020 stock prices).
| HongKong Land stock | 24.31% |
| Sembcorp Industries stock | 8.55% |
| YangZiJiang stock | 8.51% |
| SPH stock | 7.95% |
| Jardine C&C stock | 7.74% |
| OCBC stock | 7.45% |
| JMH USD stock | 7.24% |
| UOB stock | 6.94% |
| DBS stock | 6.80% |
| CapitaCommercial Trust | 5.94% |
From the list above, I have some points to make.
HongKong Land stock is an outlier Straits Times Index stock having just a Price-to-Book ratio of 0.235 and a relatively high dividend yield of 5.714%. That accounts for the high normalized dividend yield for HongKong Land stock. I would reckon that HongKong Land could be privatised in time to come.
Sembcorp Industries stock used to trade at $6.60 back in 2007. As of yesterday, Sembcorp Industries stock traded at less than a quarter of the aforementioned stock price at $1.55. The stock currently has a dividend yield of 3.33% and is undervalued with a Price-to-Book ratio of 0.39.
As for the STI banking stocks, OCBC stock seems to be the most attractive stocks of the trio stocks in DBS, OCBC and UOB
That’s it for my insights today. I Thank you once again for your support of SG STOCKS INVESTING, your Money and Lifestyle magazine! Connect with me here to follow the daily exciting and useful posts on these two blogs, Thank You for your support!
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