Thursday, July 30, 2015

ST Engineering Review

ST Engineering brings to mind a good sturdy dividend stock. But is it really? Remember, even blue chips can fail as any one who has bought NOL will attest to (myself included). 

Let's check out the numbers:
P/E ratio is on the high side of 19.58
P/B ratio is 4.72
P//Sales at 1.59
ROA is a paltry 4.02% 
ROE is really pretty good at 22.54%. In fact in 2009, the ROE was at 30%!
Revenue QOQ is -2.6%, with earnings QOQ at -5/3%
EPS is 0.17 
Book value at 0.70 

What's great about the company is the cash on hand. Management has also been making prudent decisions as seen by its decision to bring down the current debt. There was a fall of 15% of cash for 2014, but there was also a drop of 25% in short term debt. 

The cashflow from operations minus capex is 400M. With the current price, the dividend yield is 4.5%. That isn't too bad. 

Verdict: I will keep a close watch on this and look to purchase on dips. This will be a good defensive stock to have in times of downturn. Even during the 2008-2009 crisis, the dividends remained constant. 

No comments:

Post a Comment