- SCC’s price closed at P32.90 on March 15, 2018
- SCC’s is valued at P49.35 ~ P74.02 per share for a potential gain of 50 ~ 125% from the current price.
- Catalyst: Dividend declaration which is on the last week of April
Computation of SCC’s worth:
Based on the released 4th quarter report of SCC, total revenue is P 43,944 million and the net income is P 14,146 million.1 To get the complete details on SCC’s source of revenue and company profile, kindly see Company Profile: SCC.
The dividend discount model was used to compute for SCC’s worth. SCC’s policy on dividend payout is 20% of prior year net income2 though, 2016 dividend payout is at 50% of prior year net income and at 88% in 2017 due to the regular and special cash dividends declared. 3,4 In 2018, SCC already declared P1.25 per share. 5
Using Capital Asset Pricing Model (CAPM), discount rate is at 8% and assuming a dividend growth of 5%, the Company’s stock can be valued as follows under 20% and 30% dividend payout:
In the short term, assuming SCC will continue to pay dividend at P4 – P5 range we can expect an additional cash dividend of P2.75 which at the current price of SCC at P32.90 will yield 8%.
Disclosure: This is not a recommendation to BUY or SELL but treat our blog as a tool to aid you in your investment decision making.
Position: I do not own any shares mentioned above.
- 4th quarter report, page 2 https://goo.gl/F4UERw
- 2016 Annual Report, page 52 https://goo.gl/FfA9LL
- 2016 Annual Report, pages 104 and 80 https://goo.gl/FfA9LL
- 3rd quarter report, page 61 https://goo.gl/s9DMvM
- SEC 17-C Declaration of Cash Dividends, https://goo.gl/fDtxZg