The profit multiplier of large real estate companies listed on the EGX has varied markedly in the past year from a steep decline to a high increase.
The profit multiplier is a financial indicator that gauges a share’s trading price in the stock exchange compared to the profits achieved. It is also considered one of the indicators of anticipating the share’s opportunities for appreciating value.
This multiplier is measured by dividing the share’s market price by its share of the company’s profits. The more the profit multiplier declines, the more chance the share has to rise in value.
The data hereafter is based upon the value of the share’s price as per the closing prices of the Sunday 3 April session and the profit multiplier of shares in 2015.
Palm Hills’ share achieved the best profit multiplier among large real estate companies at a ratio of 5.96. The highest share price was recorded EGP 2.92 at the end of the trading on the 3 April session, while earnings per share (EPS) amounted to EGP 0.49 in 2015.
Sixth of October Development and Investment Company (SODIC)’s shares came second with a profit multiplier ratio of 13.16 , as a result of dividing the EGP 12.11 share by the earnings per share which reached EGP 0.92 in 2015.
Talaat Moustafa’s share came third with a profit multiplier ratio of 16.92, where the share’s price was recorded at EGP 6.32 at the end of Sunday’s trading session. Earnings per share reached EGP 0.3735 in 2015.
Talaat Moustafa was followed by Emaar Misr for Development which came in fourth place with a profit multiplier ratio of 16.94. This is as a result of dividing the share price, which reached EGP 2.71 at the end of Sunday’s session, by earnings per share estimated at EGP 0.16 in 2015.
Madinet Nasr for Housing and Development came in fifth place with a 24.2 ratio, where the record share price was EGP 22.27 at the end of Sunday’s trading session, and the earnings per share were EGP 0.92 in 2015.
Heliopolis Housing and Development’s share came last with a profit multiplier of 31.36 times. The share price is EGP 51.74 and its earnings were EGP 1.65 per share in 2015.