Starhub’s share price has taken yet another tumble in recent weeks following the announcement of a dividend cut. Management really took a sledgehammer to their dividend, cutting it by 44% from 16 cents to 9 cents per annum.
Now that the stock has settled in a rough trading range in the $1.50s, I decided to ask myself if the worst is over.
Balance Sheet Review
As with any income stock, I start with the balance sheet. Let’s be frank, the balance sheet isn’t pretty. Here are some balance sheet extracts and ratios I calculated based on their FY2018 year end results:
Intangible assets consists of Spectrum costs, Software costs and Goodwill. Depending on how conservative you are, you can exclude/include intangibles in your ratio.
Debt ratios generally doesn’t look too good, with debt to asset ratios ranging from 39% to 63% depending on how conservative you are. Debt to