A Quick Look into 4 Blue Chips Trading at Low P/B with High Dividend Yield

Price to Book (PB) Value measures the difference between current share price and the book value per share. Book value, as the name suggests, refers to the amount of assets carried on a company’s accounting book, after deducting all its liabilities. This is also known as the Net Asset Value (NAV).

By dividing the book value or NAV by the total number of shares, we will get the NAV per share. Comparing the share price against NAV per share gives an indication of how cheap or expensive the share is vis-à-vis the amount of net assets embedded in each share.

The formula of Price/Book Value

All things equal, between two shares, an investor would pick the company with lower PB since it is deemed cheaper, and there is a greater chance that market, being efficient ...