Today, the share price of DBS (SGX:D05) surged by more than $1 or 2% after announcement of $2.52 billion Q4 24 earnings, record high full year profit of $11.29 billion, $0.60 quarterly dividend per share and $0.15 quarterly capital return for next 3 years.
I pounced on the fear of missing out motivation to nibble some more DBS shares using idle SRS funds.
There it goes.
Ideally, I would prefer to add DBS at below $40 however it is very challenging to time the market.
Even at $46, DBS has a forward yield of more than 6.5% assuming annual dividend of $3 (inclusive of 4 quarters of $0.6 dividends and $0.15 capital return) and based on less than 60% payout ratio. Hence it is very attractive relative to S-Reits which pay at least 90% of their income to achieve more than 5% yield.
Recently, DBS has also bought back its own shares at around $43 - $44 as part of its $3 Billion share buyback programme. Hence, I feel that at $45-46, DBS is still not expensive but still below its intrinsic value of $50 - $60 based on future cashflows and earnings.
I am focused on making the idle funds in my SRS work harder as they were recycled from the sale of ST Engineering in my SRS portfolio.
It is crucial that long-term investors like us always remain calm, unwavered and focused on our investment objectives.
While the share prices of local banks and US tech stocks may remain volatile, we have nothing to fear if we are in the game for the long haul.
I shall continue to monitor and shall not hesitate to add more local bank shares for alignment with my investment objectives in the future.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Investment decisions should be made based on individual circumstances and after careful consideration of risks and potential rewards.
Thanks for reading.
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