Dear readers, which of the three largest banking stocks DBS, OCBC and UOB is the most attractive now? Different investors have different metrics of measuring and defining attractiveness. Below is my personal take of which banking stock is the most attractive.
First, in terms of price-to-book ratio, DBS stock is now fully valued with a Price-to-Book ratio of 1. Its two other counterparts OCBC stock and UOB stock are undervalued. OCBC has a Price-to-Book ratio of 0.844 while UOB stock has a Price-to-Book ratio of 0.856.
Second, in terms of dividends-yields, DBS stock currently offers a 6.16% dividend yield, OCBC’s is 5.86% and UOB’s is 5.162%
Last but not least, we do the comparison now based on dividends normalized on a fully-valued basis (i.e. price-to-book ratio is 1). With DBS’ stock already fully-valued, DBS’ normalized dividend yield is 6.16%. OCBC’s normalized dividend yield is calculated as 6.94%. UOB’s normalized dividend yield is calculated as 6.03%.
Hence, based on normalized dividend yield, OCBC’s 6.94% stood out for me. Hence, I view OCBC stock as the most attractive STI banking stock now. I will however steer clear of any investing in the near-time as I view stocks markets will head south generally.
That’s it for my insights today. I Thank you once again for your support of SG STOCKS INVESTING, your Money and Lifestyle magazine! Connect with me here to follow the daily exciting and useful posts on these two blogs, Thank You for your support!
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