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Today, we will be switching gears to look at dividend stocks. As I am based in Singapore, we will use a Singapore Dividend stock, Mapletree Logistics Trust. In this case study, we will only do a quick valuation, without going into the details of the company.

Here is the historical performance of the company:

If we were to look at a reasonable growth rate based on the formula ROE x (1 – Dividend Payout Ratio), then we will have a growth rate of 7.53%. However, considering a dividend growth rate of -37.33% in the trailing 12 months, we have adjusted this down to 4.72%.

We have also did some calculations on the fundamentals of three of the five REIT ETFs listed on SGX, and noted that the average 5 year NAV return for us is 1.38%. However, this is lower than our usual hurdle rate of 8%, which is what we are going to use.

This sets up the following calculations:

Adding up all the discounted dividend values and using a (base, bear, bull) case probability weighting of (0.8, 0.15, 0.05) in the same way we did for Regeneron Pharmaceuticals, we yield an intrinsic value of $0.37, which is way lower than the current share price of $1.73. This suggests that the company is overvalued.