SGX-listed Oversea-Chinese Banking Corp. Ltd. (SG:O39) and United Overseas Bank Ltd. (SG:U11) are popular among investors for their steady dividend income. These stocks are good options for investors in search of additional income within their investment portfolios. Both banks have recently announced commendable earnings results for the first half of 2023, which serves to strengthen their dividend standing even more.
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According to analysts, these stocks have received Moderate Buy ratings and also offer around 15% upside to their current share prices.
Here we have used the TipRanks Top Singapore Dividend Stocks tool to screen these companies from the Singapore market. This tool proves useful in narrowing down stock selections from a comprehensive list of choices by analyzing them based on various parameters.
Let’s take a look at these companies in detail.
OCBC Share Dividend 2023
Oversea-Chinese Banking Corporation, commonly known as OCBC Bank, holds the distinction of being the oldest and one of the largest banks in Singapore. With a robust footprint in regional markets, the bank regards China as its second-most profitable region.
OCBC’s appeal to investors and traders remains significant, driven by its notable dividend yield of 5.49%. This is significantly higher than the sector average of 2.1%. The bank declared an interim dividend of S$0.40 per share for the first half of 2023, marking a 43% increase from S$0.28. This decision corresponds to a payout ratio of 50% based on the group’s net profit for the first half.
Additionally, the impressive performance in their strong Q2 earnings report positions OCBC as a compelling choice among local bank stocks. The bank has achieved remarkable record profits of S$1.71 billion in the first half of 2023. The major driving force in the results was the higher net interest income for the bank. The net interest margin for Q2 was 2.26%, up from 1.71% last year, and is expected to remain above 2.2% for the full year 2023.
What is the Target Price for OCBC Share?
According to TipRanks’ rating consensus, O39 stock has a Moderate Buy rating backed by a total of nine recommendations from analysts. The average target price is S$14.19, which is 15.2% higher than the current price level.
YTD, OCBC share price has experienced a gain of over 7%.
UOB Dividend Yield 2023
United Overseas Bank, or UOB, is among the top three banks in Singapore. The bank has taken assertive steps to significantly broaden its market footprint across the Southeast Asian region.
The bank recently paid its interim dividend of S$0.85 per share, higher than S$0.60 in the corresponding period of 2022. This reflects a payout ratio of approximately 49%, leading to a yield of 4.79%.
UOB also delivered a solid set of H1 earnings for 2023, supported by higher interest rates and a recovery in investment income. For the second quarter, UOB disclosed net profits of S$1.4 billion, marking a 27% year-on-year increase and aligning with the consensus among analysts. In the second quarter, UOB observed a 31% year-on-year increase in net interest income, reaching $2.44 billion. This growth was primarily driven by a 45 basis point expansion in net interest margin, a pivotal measure of a bank’s profitability, which reached 2.12%.
The bank is highly optimistic about its performance in the ASEAN region, backed by a relatively calmer interest rate landscape and an increase in tourism and service demand.
What is the Target Price for UOB?
Backed by six Buy and three Hold recommendations from analysts, U11 stock has a Moderate Buy rating on TipRanks. The average target price is S$32.51, which shows a change of 16.8% from the current level.
YTD, UOB share price has been trading down by 3.36%.
Conclusion
Dividends serve as an excellent source of passive income. They not only act as a valuable addition to your earned income but also stand as a concrete reward for your investment. These two SGX-listed banks provide that opportunity by delivering consistent dividend payments, supported by robust operational achievements.
