BOQ share price at $7: here’s how I would value them

Group 1: Valuation of Bank of Queensland Limited (BOQ) - The current share price of BOQ is approximately $7.09, with a calculated PE ratio of 17.3x based on FY24 earnings per share of $0.41, compared to the banking sector average PE of 19x, leading to a sector-adjusted PE valuation of $7.97 [6][11] - A Dividend Discount Model (DDM) suggests a valuation of BOQ shares at $7.19, using a blended growth and risk rate, while an adjusted dividend payment of $0.35 per share increases the valuation to $7.40 [11][12] - Considering fully franked dividends, the valuation based on a forecast gross dividend payment of $0.50 results in a share price valuation of $10.57 [12] Group 2: Investment Appeal of Banking Sector - The financial/banking industry is favored by Australian investors, particularly for dividend income, with major banks operating in an oligopoly [2][3] - Despite attempts by large international banks like HSBC to penetrate the Australian market, their success has been limited, reinforcing the appeal of local bank shares [3] - Investors are particularly attracted to bank shares for their potential franking credits, which enhance the value of dividends received [3]