OKP - 8.3% dividend yield

Moving up . 57 cents today
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[Joes 02-12-2011]:

I have been looking at OKP on & off for some months. The volume of trading is low, which means that the shareholders are long term, and there is little BB pushing up & down of this stock. The fundamentals are pretty good so it is a stock for value investors. The half-yr dividend was 1 cent. Final dividend may be 2+2 cents, as was the case last year. OKP should not disappoint or it will lose ground, especially when the order book is so big and the future is secure. The cash is strong too. So assuming it's 4 cents + 1 cent = 9% dividend yield for the longterm holders. Better than buying REITs, since OKP is potentially a growth stock.

OKP should seriiously considering doing better than give 4 cent final dividend -- how about 5 cents? The dividend yield would then be juicy at 8.8% and attract investors to this undervalued stock

Only 2 cents final dividend. No special 2 c special div. Thumbs down!

(( Taken with the interim dividend of 1.0 cent per share which the Group paid in August 2011, the total dividend of 3.0 cents per share works out to a dividend yield of 4.6% based on yesterday’s closing share price of 65.5 cents and a dividend payout ratio of 33.3% for FY2011. ))

Too boring a yield!

Gross Profit Margin of 64.8% in 4th quarter is fantastic. Was double that in 4Q10.

OKP attributed it to "cost savings in certain design-and-build construction projects, which
yielded higher gross profit margins, and better project management and tighter cost controls."

Can this margin be sustained? I doubt it. It's not in the nature of construction work to have so fat margins on a sustained basis. 

The ever bullish CIMB had this to say this morning ....


OKP Holdings announced its 4Q11 net profit of S9.5m (+105% yoy). This lifted FY11 net profit to
S$26.6m (+57% yoy), beating our numbers by 27%. We retain our BUY rating for the stock. Target price of S$0.98 is under review, pending analysts briefing today.

OCBC also has a higher target price -- but to me it's not enough meat left.

"Maintain BUY. We continue to like OKP’s track record, exposure to government spending and growth possibilities. Applying a 7.5x P/E peg to FY12 earnings (adjusted for higher margin assumptions for different project mix), we derive a new fair value of S$0.75 (previous FV S$0.64), maintain BUY."