How does the Bank of Queensland (ASX:BOQ) dividend compare to its sector?

We look at how the Bank of Queensland dividend measures up against its competitors.

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The Bank of Queensland Limited (ASX: BOQ) dividend ticked up a notch last earnings season on the back of an improved performance for FY21. In particular, the regional bank achieved an increase in cash earnings, net interest margin (NIM) and cash earnings per share (EPS).

The surging profits led the company to give back to its shareholders, reflecting its consistent dividends policy.

But let’s see how the Bank of Queensland dividend stacks up against its rivals.

How does the Bank of Queensland dividend stack up?

Bank of Queensland is set to pay a fully franked final dividend of 22 cents per share to eligible investors on 18 November.

When combined with its interim dividend of 17 cents apiece, this brings the total FY21 dividend to 39 cents.

Based on the closing Bank of Queensland share price of $8.73 yesterday, this gives a dividend yield of 4.4%.

What about its competitors?

The company’s main direct competitors are Bendigo and Adelaide Bank Ltd (ASX: BEN) and the big four banks. They include Commonwealth Bank of Australia (ASX: CBA)Westpac Banking Corp (ASX: WBC)Australia and New Zealand Banking Group Ltd (ASX: ANZ) and National Australia Bank Ltd. (ASX: NAB).

By comparison, Bendigo and Adelaide Bank rewarded its shareholders with a fully franked final dividend of 26.5 cents per share.

The full-year dividend, comprising of an interim dividend of 28 cents apiece, equates to 54.5 cents per share. Bendigo and Adelaide Bank shares finished yesterday at $9.22, which gives it a dividend yield of 5.9%.

Another competitor in the sector, Westpac, is on track to distribute a final dividend of 60 cents per share to shareholders on 21 December. The company’s interim dividend for the FY21 period came to 58 cents a pop, translating to a full-year dividend of $1.18.

Calculating using the last price of $22.71 for Westpac shares, this is a dividend yield of 5.19%. 

Comparing the Bank of Queensland dividend yield against its peers may be one point to consider when investing. However, it is important to also look at the total shareholder return for the past 12 months.

As such, Bank of Queensland shares have gained 36% for the period, while Bendigo and Adelaide Bank and Westpac shares have moved up 27% and 21% respectively.

Are Bank of Queensland shares a buy?

A number of brokers weighed in after the company released its full-year results in mid-October.

Analysts at Citi slapped a “buy” rating on the Bank of Queensland share price, raising its outlook by 6.1% to $10.50. On the other hand, Credit Suisse and Morgan Stanley cut their price targets by 4.3% to $11 and 1% to $10.40 respectively.

However, the most recent broker note came from Morgans which lifted its view on Bank of Queensland shares by 1.9% to $11. Based on the current share price, this implies an upside of around 26% on Morgan’s assessment.

Bank of Queensland commands a market capitalisation of roughly $5.59 billion, with approximately 640.89 million shares on its books.

Should you invest $1,000 in Bank of Queensland right now?

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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Bendigo and Adelaide Bank Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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