Analyze 5 Companies Which Are Come from Banking Sector, Media Sector, Telecommunications Services Sector, Consumer Durables Sector and Transportation Sector

Topics: Stock, Stock market, Arithmetic mean Pages: 22 (7486 words) Published: August 22, 2012
Content

Approach I: “Dividend Discount Model”3
(1) Dividend payout in 7 years3
(2) Constant growth rate estimation4
(3) Net earnings from same sector11
(4) ROE for the companies in the same sample set16
(5) Share price estimation by DDM21
Approach II: “Valuation Multiple”23
1) Price – earning ratio of each sector23
2) Share price estimation by PE ratio28
Reconciliation report30
In this assignment, we are going to analyze 5 companies which are come from Banking Sector, Media Sector, Telecommunications Services Sector, Consumer Durables & Apparel Sector and Transportation Sector. The analyses include: • The last seven years’ dividend payout data of the five companies; • The estimation method used to compute the proxy value for the constant growth rate term; • Net earnings of all the companies from the same or a closely related sector in our sample sets; • The individual ROEs for the companies in the sample sets; • The calculation of average price-earnings ratio, earnings-per-share, expected earnings-per-share and estimated share price applying the “valuation multiple” approach for each of our chosen five companies; • Reconciliation report comparing & contrasting the theoretical share prices obtained using the two different approaches as well as the actual market price for each of our five chosen companies.

Approach I: “Dividend Discount Model”

(1) Dividend payout in 7 years

For banking sector, Australia and New Zealand Banking Group Limited (ANZ) was chosen.
|Dividend (in cents) | |2004 |2005 |2006 |2007 |2008 |2009 |2010 |

(data from http://www.aspecthuntley.com.au.ezproxy-f.deakin.edu.au/af/company/dividendspay?ASXCode=ANZ&xtm-licensee=finanalysis Accessed on 13th August 2011)

For Media Sector, Austereo Group Limited was chosen to be analyzed. |Dividend (in cents) | |2004 |2005 |2006 |2007 |2008 |2009 |2010 |

(data from http://www.aspecthuntley.com.au.ezproxy-f.deakin.edu.au/af/company/dividendspay?ASXCode=AEO&xtm-licensee=finanalysis, Accessed on 13th August 2011) For Telecommunications Services Sector, Telecom Corporation of New Zealand Limited was chosen to be analyzed. |Dividend (in cents) | |2004 |2005 |2006 |2007 |2008 |2009 |2010 |

(data from http://www.aspecthuntley.com.au.ezproxy-f.deakin.edu.au/af/company/dividendspay?ASXCode=TEL&xtm-licensee=finanalysis Accessed on 13th August 2011)

For Consumer Durables & Apparel Sector, Tamawood Limited was chosen to be analyzed. |Dividend (in cents) | |2004 |2005 |2006 |2007 |2008 |2009 |2010 |

(data from http://www.aspecthuntley.com.au.ezproxy-f.deakin.edu.au/af/company/dividendspay?ASXCode=TWD , Accessed on 13th August 2011)

For Transportation Sector, Mainfreight Limited was chosen to be analyzed. |Dividend (in cents) | |2004 |2005 |2006 |2007 |2008 |2009 |2010 |

(data from http://www.aspecthuntley.com.au.ezproxy-f.deakin.edu.au/af/company/dividendspay?ASXCode=MFT-NZ&xtm-licensee=finanalysis , Accessed on 13th August 2011)

(2) Constant growth rate estimation

Dividend Growth can be observed from the...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • service sector Research Paper
  • Delivering Lifelong sector Essay
  • Banking Sector Essay
  • banking sector Essay
  • Essay on bank sector
  • Service Sector Essay
  • Tourism Sector & Hospitality Sector Essay
  • Sectors Essay

Become a StudyMode Member

Sign Up - It's Free