The Bank of Queensland Limited (ASX: BOQ) is expected to announce its first half results for the 2018 financial year on Tuesday 17 April. Here is what you need to look out for when the announcement is made:
Special Dividends.
Top broker Morgans forecast that BOQ could payout special dividends if, as expected, it reports a strong capital position and surplus franking credits. BOQ announced a special dividend of 8 cents per share the last time it released results in October 2017.
Increased investment in digital.
BOQ has a strong customer focused strategy and digital transformation programs are a core part of increasing customer satisfaction. Top brokers Morgans and Morgan Stanley are both expecting investment in this area to keep increasing.
Growth in niche business segments.
With top banks Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd. (ASX: NAB) dominating the market, regional banks such as BOQ have to be innovative and come up with unique strategies to stay relevant.
BOQ has chosen to target niche segments such as agribusinesses, medical professionals and accountants to provide a specialised and more customer tailored service. Given the significant focus on this area, I expect that this segment will continue to grow faster than the rest of the business.
The BOQ share price has been trading at a PE ratio of 12 with a dividend yield of 7%.
I still think the big banks represent better value than BOQ despite their more concentrated focus on the housing market.
While BOQ pays out dividends at an attractive yield, it is not on top of my list of income generating stocks. Top of the list is this elite group of ASX listed companies which have been researched by our team of experts and are expected to raise dividends in 2018.
