Singapore prides itself on being a financial hub with access to high-quality banking and finance companies as well as talent within the space. Our local banks – DBS (SGX: D05); UOB (SGX: U11); and OCBC (SGX: O39) – are often cited as among the best, safest, strongest, or most innovative banks in the world as well.
Apart from boosting our banking and finance hub credentials, the three local banks are also the three largest companies listed on the Singapore Exchange (SGX). Together, they currently comprise close to 43% of the Straits Times Index (STI) – our local benchmark index.
- DBS – 17.5% weigtage on STI
- OCBC – 14.0% weigtage on STI
- UOB – 11.2% weigtage on STI
This means investing in the STI, close to half of our portfolio would be exposed to just the three local banks. Another thing the three local banks are known for is also paying relatively good and stable dividends to investors.
||Dividends Per Share In 1Q 2021||Dividend Yield|
|DBS (SGX: D05)||$29.86||$0.18||2.4%|
|UOB (SGX: U11)||$26.58||–||2.9%|
|OCBC (SGX: O39)||$12.56||–||2.5%|
* Information accurate as of 7 May 2021.
DBS (SGX: D05)
DBS (SGX: D05) is the largest bank in Singapore and also Southeast Asia, with operations in 18 markets including Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Malaysia, Myanmar, Philippines, Taiwan, Thailand, UEA, UK, USA and Vietnam.
Currently, DBS is trading at $29.86. This gives DBS a market capitalisation of close to $76.9 billion. Like many companies, DBS’ share price went through a roller-coaster of ups and downs in the last 1-year period – not just because of COVID-19, but also because interest rates and country-level announcements can impact their operations.
The chart above shows DBS’ share price movement over the past five years. It has generally been on the uptick. Today, trading at $29.86, it is close to its all-time highs achieved in 2018.
Like many other stocks, DBS’ share price went through a rough patch in 2020, declining more than 31% within less than a month between end-February to end-March before recovering in the latter part of the year. Overall, DBS shares ended 2020 on close to equal levels – about 0.3% down. This doesn’t include its dividend of $0.87, or 3.5% based on its end-2020 share price, paid out during the year.
In 2021, it has continued its upward momentum, gaining over 19%.
Based on today’s share price, DBS is trading at a dividend yield of about 2.4%. In its latest 1Q 2021 update, DBS announced a dividend of $0.18 per share. Investors can either receive this amount in cash or opt for a scrip dividend to receive DBS shares. DBS is also the only one of the three locally-listed banks to provide a quarterly dividend payment.
UOB (SGX: U11)
UOB (SGX: U11) operates regionally and in major global financial centres including Australia, Brunei, Canada, China, France, Hong Kong, India, Indonesia, Japan, Malaysia, Myanmar, Philippines, South Korea, Taiwan, Thailand, UK, USA and Vietnam.
UOB is currently trading at $26.58, giving it a market capitalisation of $44.8 billion. Similar to DBS – and OCBC later on – UOB’s share price saw major volatility in 2020 for the same reasons – COVID-19, interest rate shifts, government-level announcements.
Over the last five years, UOB shares have also been on an uptick. However, its shares have not yet reached close to its all-time high levels last achieved in 2018.
As expected, 2020 was a volatile year for UOB. In a two-month period between end-January to end-March, UOB’s share price also tanked 28.9%. Thereafter, UOB shares continued to recover during the remainder of the year – while still facing volatility in its ups and downs. Overall, it ended the year down close to 14.5%. UOB also paid a dividend of $0.78, which translates to nearly 3.5% based on its end-2020 share price. Its shares were also available to investors in cash or in scrip.
Its shares have continued its upward trajectory in 2020, gaining about 18% rise in the year-to-date. UOB pays out dividends on a half-yearly basis, and did not announce any dividends during its latest 1Q 2021 announcement.
Based on today’s share price of $26.58, UOB’s dividend yield is about 2.9%.
Read Also: 4 Dividend-Paying ETFs On SGX To Invest For Dividend Income: iShares Barclays USD Asia High Yield Bond Index ETF (O9P); Lion-Phillip S-REIT ETF (CLR); NikkoAM-StraitsTrading Asia ex Japan REIT ETF (CFA/COI); Phillip SING Income ETF (OVQ)
OCBC (SGX: O39)
No list of Singapore banks is complete without discussing OCBC. OCBC also has a strong regional and global presence, in Australia, China, Hong Kong, Indonesia, Japan, Myanmar, South Korea, Taiwan, Thailand, UK, USA and Vietnam.
OCBC is currently trading at $12.56, giving it a market capitalisation of $56.2 billion.
OCBC’s shares have also been gradually rising over the past five years. Like UOB, its shares haven’t touched its all-time high levels previously hit during 2018. Among the three banks, DBS is the only one trading at close to its all-time high levels.
It may be slightly redundant to mention this again, but OCBC shares were also similarly affected by macroeconomic factors, including the COVID-19 pandemic in 2020. You can see in the chart above that its shares crashed more than 25% in a 2-month period at the start of 2020 before recovering. OCBC ended 2020 with its shares down about 8%.
So far in 2021, OCBC’s share price has risen about 25%. This makes it the best performing stock out of the three locally-listed banks. OCBC also pays out dividends on a half-yearly basis, and did not provide any dividends for its 1Q 2021 announcement.
In 2021, OCBC announced $0.159 in dividend (as part of its FY2020 announcement in February 2021). This translates to a dividend yield of 2.5%.
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4 Stocks This Week is not a recommendation from us to buy or sell any of these stocks. For investors who are keen to find out more, you should continue researching about them before making your investment decisions.