Singapore Strategy - Screening Out Yield Stocks With High ROE Screening for ideas.
In a low interest rate environment, we believe stocks offering sustainable high dividend yield will continue to outperform. We screen stocks with attractive dividend yield and high ROE for BUY ideas. This report highlights our top picks based on this screening exercise. Result of our high yield and ROE screen. Under this exercise, stocks that appear compelling include M1, SIA Engineering, ST Engineering, Yangzijiang and SPH. SMRT also appeared on the screen but we are not positive on this given expectations that the group may have to reduce dividends in view of its heavy cash outflow for capital expenditure. The group had already cut its FY13F interim dividend. We have a SELL on SMRT with a target price of S$1.27.
M1 (BUY, Target Price: S$3.02)
- Expect sequential improvement in 4Q12 revenue and earnings.
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