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Olivia asked 5 months ago

Dear Victor, 
I keyed in the numbers into your excel for Singtel and got a 3.4 for PB. Do I just take 3.4 as the fair value or do I have to multiple by the EPS to get the intrinsic value?
In addition, I have 161% for Dividend Payout Ratio and 262% for Dividend Payout Ratio (Exclude Extraordinary Item). Do the percentage look normal?

1 Answers
Victor Chng answered 5 months ago

Hi Olivia,
 
1.For Singtel, they are a operating type of business instead of asset business. So you have to use PE ratio to value them by plotting the PE chart and find out their average. 
 
2.Singtel is currently paying out more than what they are earning so your figures are right. 

 
This is based on my personal opinion: Singtel’s industry is being disrupted with multiple competitors reducing their price to capture market share. Hence, it will be tough for them and the probability of them going bad is high. There are other better companies to look at than Singtel.