GAB’s share price has climbed by 9.5% since it was first added in our Dividend Yield portfolio on 4 Jan 2013. Including the group’s interim dividend of 20.0 sen that went ex-entitlement on 18 March, our total return on GAB now stands at 10.7%. The group’s share price has surged by as much as 13.9% to a historical high of RM18.68 on 15 March before profit taking kicked in. At the current price of RM17.96, GAB is currently trading at 24.9x FY13 PER (above a +2 standard deviation level above the mean), which we deem to be expensive when compared to the group’s 3-year average PER of 15.3x and its closest competitor – Carlsberg’s 3-year average PER of 14.1x. Meanwhile, the group’s net dividend yield of 3.6% (or 64.8 sen) is also no longer attractive in our view. In conclusion, we advise investors to take profit on GAB at RM17.96.

 

Source: Kenanga