市场见解

Which Singapore Bank is the Cheapest Right Now?

Singapore banking stocks are cheap now. Here’s which bank I think stands out for investors based on its attractive valuation. – Singapore stocks

One of the most hated industries among investors now is the banking industry. There are many “good” reasons to worry about these companies, which include Covid-19, the US-China trade war, and more.

Given such pessimism, banking stocks are trading at cheap valuations as compared to other companies.

For me, it’s a good area for investors to search for investment ideas. After all, these big banks are unlikely to go anywhere in the next decade.

And this brings me to the main purpose of this article. Which of the major Singapore banks, DBS Group Holdings Ltd (SGX: D05), Oversea-Chinese Banking Corporation Limited (SGX: O39) and United Overseas Bank Ltd (SGX: U11), is the cheapest now?

I’ll try to answer the question by comparing the valuation metrics of the trio (at the time of writing). The valuation metrics I will focus on are the price-to-book (PB) ratio and price-to-earnings (PE) ratio.

The showdown

To begin with, DBS Group, OCBC, and UOB have PB ratios of 1.0, 0.8, and 0.9, respectively. The low PB ratios for OCBC and UOB suggest that both banks have lower valuations.

Next, DBS Group, OCBC, and UOB have trailing PE ratios of 12.7, 8.2 and 8.1, respectively. Here, OCBC and UOB have a lower valuation, as compared to DBS Group, thanks to their lower PE ratios.

Note that these ratios are calculated using the banks’ share prices at the time of writing: DBS Group at S$21.44, OCBC at S$9.22, and UOB at S$20.53.

Bank dividends

Traditionally, income investors like to hold stocks of these three banks thanks to their solid track records of paying sustainable dividends over long periods of time.

For this group of investors, they would also want to know which bank is offering the best dividend yield today. The respective dividend yields for DBS Group, OCBC and UOB are 5.7%, 5.7%, and 6.3%.

All three banks have a high yield of more than 5%, but UOB is the clear winner here with its 6.3% yield.

Foolish conclusion

In sum, all three banks are trading at an attractive valuation. In particular, OCBC’s and UOB’s shares are cheaper thanks to their lower PB and PE ratios.

But the clear winner here for me is UOB since it has the highest dividend yield among the three Singapore banks.

More reading

The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Hong Kong contributor Lawrence Nga doesn’t own shares in any companies mentioned.

The Motley Fool Hong Kong Limited(www.fool.hk) 2020

随时随地,交易世界!

移动APP平台,拥有 12 个市场的 50,000 多种全球上市证券(全球市值超过 70%),直接在您的 Android 或 iOS 设备上即可操作。

与独有的交易理念和投资分析工具相结合,帮助您在我们 12 个全球市场中的几乎所有金融工具上找到可操作的见解,从而帮助您优化交易策略。

推荐给您的朋友

向您的朋友推荐Monex并赠予他们免费使用我们交易工具的机会

我们尊重您的隐私,只会向您的朋友发送一封邮件 

与您的朋友分享

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!