SPH a top defensive play: Macquarie

Stock Name: SPH
Company Name: SINGAPORE PRESS HLDGS LTD

Research House: MacQuarie

Price Call: BUY

Target Price: 4.24

Macquarie Equities Research said Singapore Press Holdings (SPH) is one of the best picks in the Singapore market because of its low valuation and expected dividend yield of 6.6%.

Macquarie, which has an outperform rating on SPH and a 12-month price target of $4.24, said that after stripping out the firm’s mall business, its monopoly media business is valued at an “unjustifiably low” 8.6 times price-earnings.

It added SPH’s dividend is sustainable because of low debt-to-equity ratio of 0.3 and robust cash flows of $328 million.

SPH shares were last traded at $3.80, an increase of 0.26%. The stock has been range-bound between $3.50 and $4.20 since 2009, Macquarie said.