Wednesday, February 28, 2024

Added more OCBC to SRS Portfolio


The share price of OCBC (SGX: O39) has corrected from the recent peak of $13.45 to $12.90 today, after announcing its 2023 full year results.

OCBC has attained 12% increase in Q4 profit to $1.62 billion and 27% increase in 2023 profit to $7.02 billion. A slightly higher dividend of $0.42, compared to interim dividend of $0.40, is announced and payable on 21 May, maintaining a dividend payout ratio of 50%. However, the results have fallen short of expectations, disappointing the market.

This near 5% correction is enough to trigger my temptation to accumulate shares.

The book value of OCBC is around $11.77 and ideally I would prefer to pay lesser than the book value.

However, I added 500 shares to my ultra long-term SRS portfolio when my order got filled at $13.02 this morning.

As OCBC is currently on cum dividend of $0.42, net cost less dividend is $12.60 which is just 7% above book value, at a fairly attractive dividend yield of more than 6%, assuming OCBC maintains an annual dividend of at least $0.84 for the next few years. The next dividend in Aug 24 of at least $0.42 should drive down my net cost to closer to book value.

I last added OCBC share last year at $11.93added OCBC shares in 2022 at $11.56 and also added OCBC shares in 2020 at $7.87 during the market shake-up from onset of the pandemic.

With this addition, I will own 5,000 shares of OCBC at an average net cost of $9.17 only, positioned to collect at least $4.2k of dividends this year and for many years or decades to come optimistically.

My long-term plan for SRS remains the same - to slowly and steadily accumulate OCBC shares via dollar cost averaging every year, because my SRS account is owned by OCBC and I intend to own the bank which owns my retirement funds.

Be greedy when others are fearful!

Thanks for reading.

With Love & Peace,

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