OCBC ups dividend by 5%! $7 billion net profit!

OCBC has declared a dividend of 42 cents per share, up from 40c a year ago.

This represents a 5% increase which makes me happy.

Full year dividend per share is, therefore, 84c.

This is an increase of some 21% from a year ago.

Payout ratio is about 53% of net profit.

The stellar results of 2023 was driven mainly by higher net interest margins across all its markets.

Net profit was in excess of $7 billion, up 27% from a year ago.

I like that OCBC has continued to drive costs lower with a lower cost to income ratio of 38.7%.

For people who are worried about OCBC's exposure to China, I have said before that they anticipated the problems early on like DBS and limited their exposure to the troubled property sector.

Their NPL ratio is at a very manageable 1.0%.

OCBC, like DBS and UOB, is well capitalized and well managed.

Even as net interest margins come under pressure, OCBC is expected to perform relatively well and should continue to pay attractive dividends.

This is especially when the current 53% payout is pretty undemanding.

In terms of valuation, OCBC is similar to UOB in that it trades at 1.1x book value, has a PE ratio of around 8x but it has a more attractive dividend yield of some 6.2%.

The last time I bought more of OCBC's common stock was in the middle of last year at between $12 to $12.30 a share.

In a recent YouTube video I produced, I said that immediate support has moved higher to $12.60 a share.

This has likely moved higher again to $12.90 a share which is where we find the rising 50 days moving average.

As OCBC is already my largest investment, I am in no hurry to add to my position.

If I have yet to initiate a position, I would buy some on a possible pullback in stock price to under $13 a share.

Just to get a foot in the door and not throwing in everything including the kitchen sink.

If AK can do it, so can you!