Posted on January 31, 2008 - by Drizzt

SPC: Good Dividend Play

By: Drizzt

Singapore Petroleum Corporation just delivered another good set of earnings. Its been a very fruitful dividend stock for me.

Some Ratio Stats:

• ROIC is 14%. This is slightly weaker than what i previously recorded. Probably due to the way i account for debt. I used to account only long term debt but now i factor in short term borrowings as well since they are essentially borrowing.
• Operating Margin is almost the same. Oil price rise and fall but the margin remains. I have to read in detail to give an assessment into this. A thing to note about refining margins is that a sky high oil price may not entirely benefit SPC. They work when oil price is at its optimum.
• At $6.10, current performance is 92% of its market capitalization. this is based on WACC of 10%. If u value its cashflow growth at 3%, its return premium is 131% of its market cap.

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