KAI ZHONG YONG asked 4 weeks ago
Hi, I am currently analysing Parkway Life REIT and would like to clarify the use of the +1SD / -1SD valuation method.
During the webinar, I believe this method was covered in the context of Price-to-Book (P/B) valuation, where we use the historical mean, +1 standard deviation, and -1 standard deviation to assess whether a REIT may be relatively overvalued or undervalued.
May I check if the same approach can also be applied to dividend yield?
For example, after clearing the 7 pre-assessment checklist steps, can I calculate Parkway Life REIT’s 5-year average dividend yield, then use the +1SD and -1SD bands to identify whether the current dividend yield suggests a relatively attractive or expensive entry point?
1 Answers
Rusmin Ang Staff answered 4 weeks ago
Hi Kai Zhong
We usually do SD for P/B or P/E but not yield. But you can try it out. I think it should works just fine for companies that have stable dividends.
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