Today is Lunar New Year eve. Happy Dragon Year to everyone in advance!
I decided to nibble DBS (SGX:D05) to give myself a forever stream of ang baos and perhaps due to fear of missing out (FOMO).
There it goes. My order is filled at $32.38.
My last purchase was in June 2023 at $30.80.
Am I averaging up or down?
Technically I am averaging up because I added shares at higher price compared to previous purchase. The net cost of my 2023 tranche is $29.95 after lessing off dividends collected and inclusive of trading costs in 2023.
Realistically, I am averaging down because there is cum-dividend of $0.54 and a 1-10 bonus share offering. The dividend and bonus shares are worth at least $3.74 ($0.54+$3.2) for each DBS share owned. Hence the net cost of DBS is only $28.61 assuming we bought at $32.38.
DBS is the world's best bank and it currently yields more than 6% despite at more than 40% above book value of $23.
Ideally I would like to get DBS at below $30 per share however my fingers are itchy and getting impatient. It is also very difficult to time the market.
Besides, the looming 4 quarterly dividends of $0.54 for FY 2024 and 1-10 bonus share (subject to approval in AGM) are almost certainly guaranteed. I believe DBS is the best candidate to compete with all the top quality Reits in my SGX income portfolio for the long-term by providing consistent and stable passive income while preserving its share price.
DBS has a great track record of rewarding shareholders consistently and steadily with growing dividends and capital gains over the past decades. It should continue to do well in this sustained high interest rate environment clouded by noises and uncertainties. Even during low interest rate environment, DBS will be boosted by lending of cheap monies by institutions and retail customers.
Should the share price of DBS plummet below $31 or $28 in the future, I shall add more shares to increase investment in this world's best bank.
2 comments:
Hi,
Just curious, why - The dividend and bonus shares are worth at least $3.74 ($0.54+$3.2) for each DBS share owned? Where did U get the $3.2?
I tot for the next FY, projected dividend is $2.16, even if its 1 for 10, dividend shd be $2.38?
Hi ckcbiz,
The $3.2 is the approx. value of 10% bonus share.
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