Bock is one of Australia’s largest regional banks, with around 200 bank branches across Australia. Unlike most big banks, many of Bok’s branches are run by their ‘owner managers’. Meaning, they are effectively small business owners themselves. Most of Bok’s loans are made up of mortgages.
BOQ share price
HR matters
For long-term investors looking to invest in great companies and hold them for 5, 10 or 20 years, we think it’s fair to say that a good workplace and staff culture can lead to better retention of high-quality personnel and a company’s long-term financial success.
Aussie investors can get one way or another like a company THE BANK OF QUEENSLAND LIMITED or BENDIGO AND ADELAIDE BANK LIMITED (ASX: BEN) is to be used as an HR/Employment website seek. Sec’s website includes data on companies’ culture, including things like employee reviews. For example, according to recent data we pulled on Bok, the company had an overall workplace culture rating of 2.6/5. less than Sector average 3.1.
Bok’s profit on loans
ASX bank shares like BOQ need reserves and good profit margins to make their business profitable. That is, a bank receives money from term deposit holders and wholesale loan investors and lends the money to homeowners, businesses, and investors. The difference between the bank payment What else do rescuers have? Makes from A mortgage holder (for example) has a net interest margin or NIM. Remember: When it comes to nemeses, the wider the margin, the better.
If you are planning to estimate the profitability of a bank like BOK or Westpac Banking Corporation (ASX: WBC), knowing how much money a bank lends and lends to borrowers per dollar. This is why NIM is the most important measure of BOQ’s profitability. Among the ASX’s major bank shares, we calculated an average NIM of 1.78 per cent while Bank of Queensland Limited’s lending margin was 1.56 per cent, highlighting its lower average return on loans than its peer group. This could be for a number of reasons, which are worth investigating.
The reason analysts study NIM so closely is that Bank of Queensland Ltd earned 93% of its total income (equivalent to income) from lending last year.
ROE: A measure of bank quality
Return on shareholder equity, also known as ‘Roe’, helps you compare a bank’s profitability against its total shareholder equity, as shown on its balance sheet. high cry better. Bank of Queensland Limited’s ROE for the most recent full year was 4.7%, which means that for every $100 of shareholder equity in the bank it generated 4.70 in annual profit. This was lower than the sector average of 9.35%.
Balance sheet protection
For Australian banks, the CET1 ratio (aka ‘Common Equity Tier One’) is important. CET1 represents a bank’s capital buffer that goes towards protecting it from financial collapse – basically, it’s the proportion of total assets that are ‘liquid’ or readily available. According to our numbers, Bank of Queensland Limited’s CET1 ratio last year was 10.7%. This was below the sector average.
BOQ share price
https://www.youtube.com/watch?v=36MUD-1ABB4
A dividend discount model or DDM is a very efficient way to account for ASX bank shares. To do DDM we have to take the last full year profit of the bank and then apply the risk rating. Last year’s total profit was $0.34. Let’s assume that the BOQ dividend payout climbs at a constant rate each year into the future, somewhere between 2% and 4%. We will use multiple risk rates (between 6% and 11%) and then average the value. The calculation we use is: Share Price = Full Year Profit / (Risk Rate – Profit Growth Rate).
| Growth rate | ||||
| 2.00% | 3.00% | 4.00% | ||
|
Hazard ratio |
6.00% | $8.75 | .6 11.67 | . 17.50 |
| 7.00% | $7.00 | $8.75 | .6 11.67 | |
| 8.00% | 83 5.83 | $7.00 | $8.75 | |
| 9.00% | $5.00 | 83 5.83 | $7.00 | |
| 10.00% | 38 4.38 | $5.00 | 83 5.83 | |
| 11.00% | 89 3.89 | 38 4.38 | $5.00 | |
According to this quick and simple DDM model, Boke’s stock has an estimated average price of $7.19. However, using an ‘adjusted’ dividend payment (expected future dividend) of $0.35 per share, which is the preferred measure because it uses forecasted dividends, the price jumps to $7.40. The valuation compares to BOQ’s current share price of $6.35. Since the company’s profits have been fully clarified, we can make further adjustments and make a valuation based on the ‘gross’ profit paid (this is the value of the profits including franking credits). Using gross dividend payments, the estimated ‘fair value’ becomes .5 10.57.
This means that the BOQ share price may appear expensive using the DDM model. It is important to consider all the risks and ideas we present here, including the benefit of improving profitability and the positive effects of franking credit.
For more information on analysis and evaluation, consider emailing our free investment report to you (continue reading). This should be one of many steps when making an investment decision. Consider reading at least two or three years’ worth of Bank of Queensland Limited annual reports and then look for good investors and analysis that disagree with your view – a reliable way to find out if you’re making a solid decision based on rigorous analysis and consider alternative opinions. Finally, before going any further with Bock or Bain shares, I recommend getting a copy of our free investment report.
