Are BOQ shares worth considering in February?

Core Viewpoint - The share price of Bank of Queensland Limited (BOQ) is under scrutiny as ASX investors attempt to establish a valuation for the company [1][2] Valuation Methods - The PE ratio is a common method for valuing bank shares, comparing the share price to earnings per share [3] - Investors can use intuition, compare with sector averages, or apply a PE multiple to earnings to determine valuation [4] - BOQ's current share price is $6.85, with an earnings per share of $0.41, resulting in a PE ratio of 16.7x, below the banking sector average of 19x [5] Dividend Discount Model (DDM) - The DDM is a robust valuation method for banks, using recent or forecasted dividends and a risk rate [6][7] - The formula for DDM valuation is Share price = full-year dividend / (risk rate – dividend growth rate) [8] - Using a blended growth rate and risk rate between 6% and 11%, the average valuation for BOQ shares is $7.19, with an adjusted dividend leading to a valuation of $7.40 [10] Gross Dividend Valuation - Considering fully franked dividends, the valuation based on a gross dividend payment of $0.50 results in a share price valuation of $10.57 [11] Growth and Risk Rate Analysis - A table outlines various growth and risk rates, showing how they affect share price valuations, with significant variations based on assumptions [12] Additional Considerations - Investors should also evaluate net interest margins, regulatory challenges, and the management team's effectiveness when analyzing BOQ [13]