SCI is down over 37% over the last 2 years due to the low oil prices which may trigger into defaults from their customers in taking delivery of their oil rigs. The recent lawsuit with marco polo brings even more fear. I do expect 2015/16 earnings to remain very weak and the recovery in earnings may only come in 2017.
I remain pessimistic on their Marine segment, however their Utilities segment should show better results next year as their mega power plants in India & China takes off.
However even with a lower estimated earnings of 35 cents, SCI trades cheaply at around 9.5 times earnings. With a 40% payout ratio of 14 cents that would give a dividend yield of 4.2% which is still decent. At one times book value, SCI is already trading at GFC and european crisis levels.
Overall this is still a risky bet and the expected recovery may take longer to come.
|Name||Current Price||Weightage||PE||Yield||Payout Ratio||Industry|
|OCBC||8.76||15.5%||9.4||4.1%||39%||Banking & Finance|
|CapitaCommercial Trust||1.31||13.4%||15.2||6.6%||100%||Commercial Reit|
|UOB||19.47||12.0%||10.0||3.9%||38%||Banking & Finance|
|Sembcorp Industries||3.32||9.6%||9.5||4.2%||40%||Marine & Utilities|
|STI ETF||2.94||8.5%||11.9||3.3%||39%||Exchange Traded Fund|
|ST Engineering||2.89||7.1%||17.0||4.8%||82%||Defense & Engineering|
|Total Weight||Portfolio PE||Portfolio Yield||Payout Ratio|