UOB Bank Dividends & Share Price Guide: Is It Worth Buying?

UOB Bank, one of Singapore’s leading blue chip stocks in the financial sector had the highest dividend yield amongst the three banks for 2020.

Being one of Singapore’s Big Three banks, it’s no surprise that UOB Bank is a favourite among Singaporean investors. 

This blue-chip stock is a Top 10 regular when it comes to dividend yields, and historically provides yields of between 3% to 4% to shareholders. UOB Bank also has a habit of giving out bonus special dividends, a move which no doubt delights investors with outsized payouts.

However, with the plunge in share price last year brought on by the pandemic, would UOB Bank still make a good addition to your portfolio? Is this stock only useful for those investing for dividend yield? 

To help you find out, this article will cover:

• UOB Bank share prices in the past five years
• How much dividends will I receive?
• UOB Bank dividends payout schedule
• What risks do I face?
• What does the future hold for UOB Bank?

UOB Bank share prices in the past five years

UOB Bank’s price chart tells a story of a rising star interrupted. 

Between 2017 and right before the pandemic hit in early 2020, share prices were doing well, surging from S$7.50 to a high of nearly S$30 in April 2018, before settling down in the S$24 to S$27 range. 

However, like many of its peers, UOB share prices could not escape the ill effects of COVID-19, dropping to a low of around S$19 in March 2020. After a protracted consolidation period that lasted till November 2020, share prices mounted a comeback, steadily improving until they matched the sub-S$30 range they were previously trading at. 

It is likely that market confidence in the stock is fanned by the bank’s continued strong performance, as signalled by convincing Q3 and Q4 results in FY2020.

How much dividends will I receive? 

Sources: https://www.dividends.sg/view/u11, https://www.uobgroup.com/investor-relations/shares-and-dividends/dividends.html

UOB Bank shareholders know to expect dividends-per-share that come close to or exceed the S$1-mark. That had certainly been the pattern in the past five years. 

This higher-than-usual rate could mean a handsome payout even if you own a relatively few number of shares, although the dividend yield percentage remains grounded between 3% to 4%. 

However, it bears noting that 2017, 2018 and 2019 all saw the announcement of special dividends of S$0.20 per share, which accounts for the bump in dividend yields in the subsequent years.

While this bumper period seems to be on pause for now, UOB has demonstrated a history of offering special dividends stretching back to 2012. There’s every reason to expect this tradition to come back under the right conditions. 

UOB Bank dividends payout schedule

UOB Bank shareholders can expect their dividend payouts twice a year. The first payout usually takes place in May or June, and includes any special dividends announced for the year. 

The second payout follows soon after, and usually takes place in August, September or October. 

What risks do I face? 

Source: https://www.sgx.com/securities/equities/U11

Judging by the stock’s five-year price chart, there’s very little reason to be afraid.

But for the pandemic, it’s reasonable to expect U11 to trade at the upper reaches of the S$30-mark, and maybe even mount a breakout like it did during 2018 - quite the feat considering the uncertainties that plagued global sentiments during that period. 

Analysts apparently agree on the strength of UOB Bank - the stock scores a healthy “Outperform” on SGX’s consensus ranking.  

What does the future hold for UOB Bank?

UOB Bank no doubt occupies a favoured position in investors' hearts as one of the solid blue-chip stocks on the SGX.

It is ranked in the Top 10 by dividend yield, easily beating out rivals OCBC Bank and DBS in this regard.

With the nasty fall caused by COVID-19 firmly behind it, UOB Bank has managed to continue posting convincing results that, while not particularly spectacular, have brightened analysts’ outlooks nonetheless. 

Given these reasons, it’s not unreasonable to expect U11 to continue on an upward trajectory as UOB Bank continues to pull out of the doldrums. 

This recovery is almost guaranteed, given the Government’s goal to transit to less restrictive policies as we learn to live with COVID-19 as an endemic disease. 

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