Is high dividend yield here to stay ?
I am sure shareholders of DBS Bank were happy to see that the management decided not to reduce dividends and paid out $0.66 per share last week for the first quarter of 2020 and year end of last year. At current valuation, DBS has an attractive 6.3% dividend yield, like a REIT. It is hard to argue that at these current valuation, DBS is a great bargain. However, if the COVID-19 and macroeconomic conditions do not get better later in the year, it is highly probable that DBS and other banks might cut their dividends such as in GFC of 2008.
I still believe that DBS is a great investment opportunity especially for long-term investors (with more than 5 year investment horizon). However, my investment and trading perspective is to use the extra cash and capital on the most