Good EPS for UBS
UBS (UBS -- click to register for free RT streaming quote), which is currently the largest market cap company in my portfolio (thanks to their good month and Google's bad one), is declining a little bit this morning following their excellent earnings release.
UBS, which is the second largest bank in Europe and has a huge wealth management business and excellent exposure to Asia and other emerging markets, reported a 32% gain in earnings (ex an asset sale), and the stock is selling off slightly this morning. They had a big run up to this point, and I expect there are some folks taking profits, but it appears that the real disappointment in the market is that they didn't make as a big a dividend move as some had hoped.
Everyone was expecting a significant dividend boost from UBS, perhaps something to bring them in line with the other big international banks in the 4% range. UBS upped their dividend to $2.91 a share -- a significant boost, but not the kind of increase the Street was expecting, and certainly not the windfall special dividend following the asset sale to Julius Baer that some had hoped for.
I'm pretty happy about UBS's progress -- I like the higher dividend, and that they are continuing a fairly aggressive buyback program as well as looking for more opportunities to expand geographically in their real areas of expertise, wealth management and private banking. I still see significant room for long term growth and am very pleased with the growth they showed last year.
The brokers have had a pretty wild year and I am a little concerned about Merrill Lynch, Bear Stearns, JP Morgan and the like, they just seem like they're too dependent on the US stock market ... and the big banks like Citigroup and Bank of America look very worrisome to me with the inverted yield curve, even though they're looking very cheap at their current low PEs and high yields.
Compared to that group, UBS looked very good to me when I made my first purchase last month. UBS's international business and their extremely profitable private bank look to me like the best way to invest in the financial industry right now with relatively limited downside, great geographical diversification, a solid dividend and potential for real growth as the wealthiest continue to enjoy capitalism's spread and grow their assets around the world. I expect this to sit quietly in my portfolio for a long time, and am not terribly worried that the dividend is going to remain under 3%.
UBS, which is the second largest bank in Europe and has a huge wealth management business and excellent exposure to Asia and other emerging markets, reported a 32% gain in earnings (ex an asset sale), and the stock is selling off slightly this morning. They had a big run up to this point, and I expect there are some folks taking profits, but it appears that the real disappointment in the market is that they didn't make as a big a dividend move as some had hoped.
Everyone was expecting a significant dividend boost from UBS, perhaps something to bring them in line with the other big international banks in the 4% range. UBS upped their dividend to $2.91 a share -- a significant boost, but not the kind of increase the Street was expecting, and certainly not the windfall special dividend following the asset sale to Julius Baer that some had hoped for.
I'm pretty happy about UBS's progress -- I like the higher dividend, and that they are continuing a fairly aggressive buyback program as well as looking for more opportunities to expand geographically in their real areas of expertise, wealth management and private banking. I still see significant room for long term growth and am very pleased with the growth they showed last year.
The brokers have had a pretty wild year and I am a little concerned about Merrill Lynch, Bear Stearns, JP Morgan and the like, they just seem like they're too dependent on the US stock market ... and the big banks like Citigroup and Bank of America look very worrisome to me with the inverted yield curve, even though they're looking very cheap at their current low PEs and high yields.
Compared to that group, UBS looked very good to me when I made my first purchase last month. UBS's international business and their extremely profitable private bank look to me like the best way to invest in the financial industry right now with relatively limited downside, great geographical diversification, a solid dividend and potential for real growth as the wealthiest continue to enjoy capitalism's spread and grow their assets around the world. I expect this to sit quietly in my portfolio for a long time, and am not terribly worried that the dividend is going to remain under 3%.
Labels: UBS
This article posted by One Guy @ 2/14/2006 10:55:00 AM 0 comments
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