To The Moon

• US stocks are on the ride of Santa Clause Rally and big techs are still favored by investors.

• With lower risks, SGX's low-PE stocks are worth taking a look at.

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Valuation and PE ratio

Anybody can gift oneself with a multiyear supply of passive income by purchasing shares of a high-quality dividend-paying company. This time, consider the undervalued ones as real good deals.

The Price-to-Earnings (P/E) ratio is a key metric used in stock investment to evaluate a company's valuation. It compares a company's current share price to its earnings per share (EPS).

For example, if a company's stock is trading at $100 per share and its EPS is $5, the P/E ratio would be 20 ($100 / $5). This means investors are willing to pay $20 for every $1 of earnings.

Investors use the P/E ratio to compare the valuation of companies within the same industry or against the broader market. It helps in assessing whether a stock is overvalued or undervalued compared to its historical performance.

Dividend Play: Low-PE Stocks in SGX

A low P/E ratio might suggest that a stock is undervalued, meaning it could be a bargain. Investors might see this as an opportunity to buy shares at a lower price relative to the company's earnings. Meanwhile, stocks with low P/E ratios also translate into lower risk--they are less risky because they are priced lower relative to their earnings. This can provide a margin of safety, reducing the potential downside risk.

SGX Dividend Play (as of 24th Dec. 2024)

Keppel (BN4), Sundaram (S56), and Boustead (F9D), having low PE multiples (<10x) and considerable dividend yields, are SGX stocks that are worth watching.

$Keppel(BN4.SI)$ : PE~3x, div yield 4.99%

Keppel Ltd. Limited was incorporated in 1968 and is headquartered in Singapore. As an investment holding company, Keppel engages in the infrastructure, real estate, and connectivity business in Singapore, China, Hong Kong, other far East and ASEAN countries, and internationally.

$SamuderaShipping(S56.SI)$ : PE~3x, div yield 2.59%

Samudera Shipping Line Ltd was incorporated in 1993 and is headquartered in Singapore. Samudera Shipping Line Ltd is a subsidiary of PT Samudera Indonesia Tbk. The company engages in the transportation of containerized and non-containerized cargo to various ports in Southeast Asia, the Indian Sub-continent, the Far East, and the Middle East, and internationally. It operates through three segments: Container Shipping, Bulk and Tanker, and Agencies & Logistics.

$Boustead(F9D.SI)$ : PE~8x, div yield 5.34%

Boustead Singapore Limited was founded in 1828 and is headquartered in Singapore. As an investment holding company, Boustead provides energy engineering, real estate, geospatial, and healthcare technology solutions in Singapore, Australia, Malaysia, the United States, Europe, rest of the Asia Pacific, North and South America, the Middle East, and Africa.

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