Kum Weng
11-01 19:26
[​symbol:D05.SI|DBS (D05.SI)] is the most expensive of Singapore’s three major banks on price-to-book, but it also offers the highest indicated dividend yield and the strongest reported ROE.

Bank P/B Dividend yield ROE Comparison with DBS
DBS (D05.SI)
watchlist
2.96x 4.27% 16.17% —
UOB (U11.SI)
watchlist
1.38x 3.84% 9.22% DBS trades at a 114.5% P/B premium ; DBS yield is 0.43 percentage points higher
OCBC Bank (O39.SI)
watchlist
2.05x 3.04% 12.74% DBS trades at a 44.4% P/B premium ; DBS yield is 1.23 percentage points higher
Read-through: DBS’s premium is substantial, particularly versus UOB, so it is not the apparent value choice on book value. The market appears to be paying for materially better profitability: DBS’s ROE exceeds OCBC’s by 3.43 percentage points and UOB’s by 6.95 percentage points . Importantly, DBS also combines that premium valuation with the highest current indicated yield, which makes the relative valuation less demanding than a premium P/B alone suggests.

Botto

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap
Leave a comment