Open AccessFundamental Valuation of Construction Stocks: A Content Analysis from Property Developers
Author(s) -
Muhamad Saiful Alizan Nordin,
Normaliza Abd Rahim,
Hamimah Adnan
Publication year - 2019
Publication title -
iop conference series. earth and environmental science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.179
H-Index - 26
eISSN - 1755-1307
pISSN - 1755-1315
DOI - 10.1088/1755-1315/385/1/012072
Subject(s) - valuation (finance) , dividend , stock (firearms) , intrinsic value (animal ethics) , business , growth stock , financial economics , economics , accounting , finance , stock market , restricted stock , engineering , mechanical engineering , paleontology , philosophy , horse , environmental ethics , biology
The expansion of the Malaysian Construction Companies requires a holistic understanding on the intrinsic values as well as the nature of growth and value features of stocks in order to effectively invest in this sector. The paper aims to assess the intrinsic values of the Malaysia construction companies using fundamental methods of valuation. Content Analysis has been employed to the 10 property developers that has been listed under the top 10 Malaysian property developers in year 2018 identified as Company A to J. Based on the data derived from the companies’ annual report, Bursa Malaysia and stock-related websites, intrinsic value of the construction stock is assessed using three fundamental methods of valuation comprising Price Earning Multiple, Relative Price Earning as well as the Dividend Growth Model. The results suggested that there is a huge inconsistencies of intrinsic values across the first two methods of valuation where most of the stocks are in the state of undervalued while valuation derived from the Dividend Growth Model signifies the overvaluation state of all stocks’ opening prices. This research is expected to provide a preliminary evidence on the intrinsic values of Malaysian Construction Companies as similar analysis and indicators can be used in reviewing the characteristics as well as fundamentally valuing the construction stock in both small and larger investment portfolios.