Are BOQ shares worth considering in January?

Core Viewpoint - The share price of Bank of Queensland Limited (BOQ) is under scrutiny as investors attempt to establish a valuation for the company amidst fluctuating market conditions [1][2]. Valuation Methods - The Price-to-Earnings (PE) ratio is a key metric for valuing BOQ, with a current PE ratio of 15.9x compared to the banking sector average of 18x [5]. - A sector-adjusted PE valuation for BOQ, based on its earnings per share of $0.41, results in a valuation of $7.52 per share [5]. Dividend Valuation - The Dividend Discount Model (DDM) is highlighted as a robust method for valuing banks, using the most recent full-year dividends and assuming consistent growth [6][7]. - Using a DDM approach, BOQ shares are valued at $7.19 with a blended growth and risk rate, and at $7.40 with an adjusted dividend payment of $0.35 [10]. - Considering fully franked dividends, the valuation could rise to $10.57 based on a forecast gross dividend payment of $0.50 [11]. Growth and Risk Analysis - Various growth rates (2% to 4%) and risk rates (6% to 11%) yield a range of valuations, indicating the sensitivity of the share price to these assumptions [12]. - The analysis suggests that investing in a low-cost, dividend-paying ETF may be a viable alternative to investing directly in BOQ shares [12]. Management and Culture Assessment - The management team's effectiveness and company culture are critical factors in long-term investment decisions, with BOQ's culture not rated as perfect but still a consideration for potential investors [13].