💰Dividend Picks | Low PB, Steady Returns : U10/S35/S41
💰The era of Trump 2.0 kicks in with a broad rally.
💹With lower PB, $UOB Kay Hian(U10.SI)$ , $Sing Inv & Fin(S35.SI)$ , and $Hong Leong Fin(S41.SI)$ are good choices for steady returns.
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| Market recap
On the first trading day of the new Trump 2.0 era, the market saw widespread gains. The three major U.S. stock indices all closed higher, with the Nasdaq $.IXIC(.IXIC)$ up 0.64%, the S&P 500 $.SPX(.SPX)$ gaining 0.88%, and the Dow Jones $.DJI(.DJI)$ climbing 1.24%. However, $NASDAQ Golden Dragon China Index(HXC)$ closed down 0.36%. Among Chinese electric vehicle makers, $XPeng Inc.(XPEV)$ rose more than 6%, and $Li Auto(LI)$ gained over 5%.
As mentioned yesterday, $Charles Schwab(SCHW)$ saw a 5.9% increase after earnings, $SoFi Technologies Inc.(SOFI)$ rose 8.5%, and $Bread Financial Holdings, Inc.(BFH)$ gained 3.6%.
Additionally, one of our readers referenced a previous post and shared his gains with us.
Tech Giants
$NVIDIA(NVDA)$ rose more than 2%, while $Apple(AAPL)$ dropped over 3%. Nvidia overtook Apple to become the world’s largest company by market capitalization.
Behind the Scenes
Trump has opened the gateway to space and is advancing U.S. AI infrastructure. OpenAI, SoftBank, and Oracle have announced the formation of a joint venture called Stargate, with $Oracle(ORCL)$ seeing a more than 7% increase.
Notable Movements
$Netflix(NFLX)$ surged more than 13% after hours, as its earnings significantly exceeded market expectations. Driven by this positive earnings surprise, Netflix saw a rebound after a period of underperformance.
| Financial Sector: PB Ratio
In a previous column, we introduced the concept of the Price-to-Book (PB) ratio.
Why is PB particularly useful for valuing financial stocks? Financial companies, especially banks and insurance firms, typically have highly liquid core assets (such as loans, bonds, and equities). The book value of these assets often reflects their fair market value accurately. The core logic of the PB ratio is the “market pricing of net assets,” making it a suitable valuation method for financial stocks.
In addition to Singapore's key financial players like $DBS Group Holdings(D05.SI)$, $UOB(U11.SI)$ , and $ocbc bank(O39.SI)$ , other important financial services firms are also worth attention. Compared to industry giants, smaller companies tend to have higher PB ratios and more attractive valuations due to their relatively smaller capital bases.
| Dividend Play For You
Financial stocks typically exhibit medium volatility, making them suitable as stabilizers in a portfolio. Large banks and insurance companies are generally considered defensive assets, especially during periods of economic stability, as their stock price movements tend to be less volatile than tech or cyclical stocks. This is due to:
- Business Model Stability: The long-term and recurring nature of businesses like bank deposits and loans, as well as insurance premiums.
- Stable Dividend Policy: Financial companies, especially banks, often maintain high dividend yields to attract investors seeking stable income.
For investors seeking steady returns with a relatively lower risk tolerance, it is advisable to diversify sub-sector risks by holding stocks from multiple financial segments, such as banks, insurance companies, and avoiding excessive concentration in brokerage stocks.
SGX Dividend Play: Low PB
$UOB Kay Hian(U10.SI)$ , $Sing Inv & Fin(S35.SI)$ , and $Hong Leong Fin(S41.SI)$ are worth noting, as their PB ratios are all below 1x, and they offer attractive dividend yields.
✅U10: PB 0.80x, ~S$170/lot
$UOB Kay Hian(U10.SI)$ is an investment holding company. The Company, through its subsidiaries, is engaged in stockbroking, futures broking, investment trading, margin financing, investment holding, and provision of nominee and research services. The Company's segments include Singapore, Hong Kong, Thailand and other countries. It provides value added services in corporate advisory and fund raising, and executes initial public offerings (IPOs), secondary placements and other corporate finance, and investment banking activities.
✅S35: PB 0.58x，~S$106/lot
$Sing Inv & Fin(S35.SI)$ is a Singapore-based licensed finance company. The Company's activities cover the acceptance of fixed and saving deposits from the public and the provision of loans and credit facilities to individuals and corporations. Its segment is credit and lending. The Company has also invested in an enterprise-wide data management system.
✅S41: PB 0.53x，~S$246/lot
$Hong Leong Fin(S41.SI)$ is a financial service company. The Company's principal activities are those relating to financing business and provision of corporate advisory services. Its business is taking of deposits from the public and provision of a suite of financial products and services that include consumer and corporate loans, and corporate advisory services. Its financial products and services also include deposits and savings, government assistance programs for small and medium enterprises (SMEs).
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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
- YueShan·16 minutes agoGood ⭐⭐⭐LikeReport