Stock Analysis

Is Now The Time To Put DBS Group Holdings (SGX:D05) On Your Watchlist?

  •  Updated
SGX:D05
Source: Shutterstock

Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away.

In contrast to all that, many investors prefer to focus on companies like DBS Group Holdings (SGX:D05), which has not only revenues, but also profits. While this doesn't necessarily speak to whether it's undervalued, the profitability of the business is enough to warrant some appreciation - especially if its growing.

View our latest analysis for DBS Group Holdings

How Fast Is DBS Group Holdings Growing Its Earnings Per Share?

Even modest earnings per share growth (EPS) can create meaningful value, when it is sustained reliably from year to year. So it's easy to see why many investors focus in on EPS growth. DBS Group Holdings boosted its trailing twelve month EPS from S$2.32 to S$2.56, in the last year. That's a 11% gain; respectable growth in the broader scheme of things.

It's often helpful to take a look at earnings before interest and tax (EBIT) margins, as well as revenue growth, to get another take on the quality of the company's growth. Our analysis has highlighted that DBS Group Holdings' revenue from operations did not account for all of their revenue in the previous 12 months, so our analysis of its margins might not accurately reflect the underlying business. While we note DBS Group Holdings achieved similar EBIT margins to last year, revenue grew by a solid 10% to S$14b. That's progress.

You can take a look at the company's revenue and earnings growth trend, in the chart below. For finer detail, click on the image.

earnings-and-revenue-history
SGX:D05 Earnings and Revenue History September 27th 2022

In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of DBS Group Holdings' forecast profits?

Are DBS Group Holdings Insiders Aligned With All Shareholders?

We would not expect to see insiders owning a large percentage of a S$85b company like DBS Group Holdings. But we do take comfort from the fact that they are investors in the company. Notably, they have an enviable stake in the company, worth S$177m. While that is a lot of skin in the game, we note this holding only totals to 0.2% of the business, which is a result of the company being so large. This still shows shareholders there is a degree of alignment between management and themselves.

Should You Add DBS Group Holdings To Your Watchlist?

One positive for DBS Group Holdings is that it is growing EPS. That's nice to see. For those who are looking for a little more than this, the high level of insider ownership enhances our enthusiasm for this growth. The combination definitely favoured by investors so consider keeping the company on a watchlist. We should say that we've discovered 2 warning signs for DBS Group Holdings (1 is a bit concerning!) that you should be aware of before investing here.

The beauty of investing is that you can invest in almost any company you want. But if you prefer to focus on stocks that have demonstrated insider buying, here is a list of companies with insider buying in the last three months.

Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction.

Valuation is complex, but we're helping make it simple.

Find out whether DBS Group Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

About SGX:D05

DBS Group Holdings

DBS Group Holdings Ltd provides financial products and services in Singapore, Hong Kong, rest of Greater China, South and Southeast Asia, and internationally.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation2
Future Growth3
Past Performance3
Financial Health6
Dividends4

Read more about these checks in the individual report sections or in our analysis model.

Flawless balance sheet average dividend payer.