Categorized | Stock Tips

Put money in a Bank or Buy Bank shares?

Most Filipinos who save put their hard-earned money in a bank, either in a normal savings account or a time deposit account. But the better way to earn for the long-term is to buy bank shares.

Let us look at the historical data of 2 of most popular and biggest banks in the Philippines, BPI owned by the Ayala Family and BDO owned by Henry Sy and Family.

Bank of the Philippine Islands
Stock Code BPI
Target Price: P118
Current Price: P103.80 (As of 4/11/13 2:45pm)
BPI Share Prices at
End of 2011: P55.20
End of 2010: P59
End of 2009: P46.69
End of 2008: P37.45
End of 2007: P49.86

BPI Dividend History:
2012 – P0.90 and P0.90 (reg)/P0.50 (spcl)
2011 – P0.90 and P0.90
2010 – P0.90 and P0.90
2009 – P0.90 and P0.90
2008 – P0.90, 20% stock dividend and 0.90 (reg)/1 (spcl)
2007 – P0.90

BDO Unibank Inc.
Stock Code BDO
Target Price: P112
Current Price: P87.5 (As of 4/11/13 2:45pm)
BDO Share Prices at
End of 2011: P53.23
End of 2010: P52.78
End of 2009: P35.18
End of 2008: P21.65
End of 2007: P54.58

BDO Dividend History:
2012 – 3% stock dividend
2011 – P1
2010 – P0.80
2009 – P0.28
2008 – P0.80 and P0.80
2007 – P0.80

If you look at the share prices of both banks, they were both up in 2007 and went down hard in 2008 but slowly climbed back in the next few years and now share prices of BPI more than doubled its value since 2007 and target price of BDO in the next 6-12 months is also more than double its price in 2007.

If you invested in 2007 and 2008, you have earned a lot not just in stock appreciation but also in dividends. That is why it is a very good idea to invest in big and solid banks like BDO and BPI for the long-term rather than put your money in a savings or time-deposit account.

There are also other banks that you can invest in like Metrobank (MBT), EastWest Bank (EW), China Bank (CHIB), Security Bank (SECB), Philippine National Bank (PNB), RCBC (RCB) and Unionbank (UBP)

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