$SIA (C6L.SG)$ : SIA prices US$500 million notes due 21st March 2034 at 5.296% yield. That work out to be S$670 million (S$1.34).
Yesterday's closing was $6.38. Last year's total dividend was $0.38. That work out to be 5.95% per annum.
If dividend remains the same as last year, the justifiable shares price is $7.17, that gives you 5.296% annual returns.
If this year's total dividend is $0.40 (very conservative figures), then the shares price should be around $7.55 in order to generate 5.292% annual returns.
However, if this year's total dividend is $0.45 (just my prediction), then it's shares price should be around $8.50 in order to achieve 5.292% annual returns as compared with it's US$500 million 10 year's bond benchmark.
So, base on my analogy, SIA yesterday's closing price of $6.38 is a good buy.
However, there are analysts predicting that this year SIA income may drop by 25%.