[Update on 19 February 2019 - There seem to be a mistake with the valuation which I've extracted from the Shares Investment website - http://www.sharesinv.com/D05/ yesterday. I checked back again today and the valuations have been updated, and I've also since updated the post accordingly.]
$DBS(D05.SI) DBS needs no introduction - I'm sure as Singaporeans, we all have a savings account with the bank.
This morning, the bank have released their 4th quarter and FY2018 results and, in my opinion, it's a positive one both quarter-on-quarter, as well as year-on-year.
Let us have a look at the results:
- Total income grew 6.2% q-o-q to $3,245 million (and grew 9.4% y-o-y to $13,183 million)
- Net profit also saw a 8.4% improvement q-o-q to $1,328 million (and a 25.5% y-o-y improvement to $5,653 million)
- Consequently, net profit attributable to shareholders also saw a q-o-q increment to $1,319 million (and a y-o-y increment to $5,577 million)
- Compared to 31 December 2017, the bank's Net Asset Value improved 1.5% from $17.85 to $18.12
- Earnings Per Share also saw a 8.6% improvement q-o-q to $2.01 (and a 27.8% y-o-y improvement to $2.16)
- Net Interest Margin improved 5.1% q-o-q to 1.87% (and 6.0% y-o-y to 1.85%)
- Return on Assets too, also grew 1.1% q-o-q to 0.95% (and grew 17.6% y-o-y to 1.05%)
- Return on Equity (ROE) for the bank also improved 7.6% q-o-q to 11.3% (and improved 24.7% to 12.10%)
- As at 31 December 2018, the bank's Non-Performing Loans (NPL) rate also saw an improvement of 11.8% from 1.7% (as at 31 December 2017) to 1.5% (as at 31 December 2018)
Needless to say, the bank's share price spiked due to the positive results - as I am writing this post, the bank is currently trading at $25.24 - and it's current valuations are as follows:
Dividend Yield: 4.8%
Comparing the above to the bank's 7-year average (from FY2012 - FY2018), P/E is trading at about the same as the average (11.5 currently vs. 11.3 on average), P/B is also trading at a premium (1.31 currently vs. 1.1 on average), and the dividend yield, which is also trading at a slight discount compared to the average (4.8% currently vs. 4.5% on average).
Based on my charting analysis, the share price broke out of the red downward resistance line and moving upwards - and from the looks of the MACD and also the RSI, it certainly seems like the share price is going to continue to head upwards in the near-term:
Dividend for Shareholders:
The bank has also declared a dividend of $0.60 (which is the same as 4Q FY2017, if you strip out the $0.50 special dividend) - with the ex-dividend date on 2 May 2019 (meaning you'll have to invest in the company before this date in order to be entitled to the dividend), and dividends will be received on 17 May 2019.
I currently own shares to the bank (since July last year) and I'm still holding on to them.
As to whether or not you should invest in the bank now. if you're looking to invest in the bank for the dividend, my personal feel is that, there's still some time to go (as the ex-dividend is on 2nd May), so if I do not own any shares of DBS and would like to invest in the bank for the dividend, I'll go in closer to the ex-dividend date.
The above is just my personal analysis and opinion. I hope you'll find it useful. However, as always, please do your own due diligence prior to investing in the bank. :)