Huat with DBS! Profit up 48%! Dividend up again!

Was feeling a little tired after a morning of activities.

Medical appointment followed by grocery shopping.

Lost some blood and still had to carry heavy bags.

After settling down at home, I read the news and I suddenly felt energized!

DBS increased their dividends to 48 cents a share per quarter!

Huat ah!

The decision to invest in DBS back in 2016 at $13 to $14 a share and continuing to accumulate over the years whenever Mr. Market felt depressed is paying off handsomely.

Annualizing 48 cents a share, annual dividend per share is $1.92 which means the dividend yield on my initial investment is in excess of 14% per annum!

Of course, with DBS being one of my largest investments, this is probably going to have an outsized impact on my passive income for the year.

I so stunned like vegetable!

What is even more impressive is that the higher dividend is probably sustainable.

DBS revealed that the expected catch up in funding cost has not been as bad as feared.

In fact, net interest margin saw a further increase of 12 basis points, quarter on quarter.

Net profit grew 48% year on year and 5% quarter on quarter!

I have said before that DBS is able to trade at a juicy premium to book value because of its very impressive return on equity or ROE when compared to UOB and OCBC.

DBS saw its ROE hit a new quarterly high of 19.2%, up from 13.4% in the same quarter last year!

DBS has a CET1 ratio of 14.1% which is in excess of what it feels is optimum.

So, we could possibly see higher dividends to come if DBS has no better use for the money.

DBS could, of course, simply hold on to the money for a rainy day.

Whatever the case might be, DBS is a rock solid investment for both income and growth.

Yes, just like what I said about investing in UOB, we can have our cake and eat it too.

OCBC should deliver good results tomorrow too.

I am feeling so giddy now, I need to go lie down for a bit.

If AK can do it, so can you!

Reference:
DBS fair value per share?
Transcript of my YouTube video @AK71SG.

Huat with UOB! Will I buy more OCBC now to huat again?

In my last two blog posts, I said that I was giddy with joy.

I expected a higher dividend from UOB and I was not disappointed.

The much higher dividend than expected was a very nice surprise!

With the stellar performance by UOB, the market is now expecting similar performance from DBS and OCBC.

DBS will be announcing results on 3 Aug while OCBC will be announcing results on 4 Aug.

Like I have said in past blog posts, OCBC is able to pay a much higher dividend because of its very high CET1 ratio.

Of course, whether they would pay higher dividends or not is anyone's guess.

OCBC's stock price has been relatively strong this year and less volatile compared to UOB and DBS.

However, in recent trading sessions, its stock price has been pushed up pretty aggressively.

Makes me happy since OCBC is my largest investment.

However, I remind myself that if we are focused as investors for income, we would not chase rising prices and we would not fear falling prices.

This is because our focus is on income.

So, I won't be adding to my investment in OCBC now.

Looking at the chart, I see similar signs of "pump and dump" when comparing to the run up in February last year in 2022.

The MFI shows that OCBC is overbought.

Volume is also declining as price tries to push higher.

Both are red flags.

We could see $13.50 a share retested but I would not be surprised to see a pull back to support currently at $12.40 a share or so.

No point paying $13.50 a share to get a 40c dividend only to see price declining by $1 or so back to immediate support.

If AK can talk to himself, so can you!