Core Insights - The share price of Bank of Queensland Limited (BOQ) is currently under scrutiny as ASX investors attempt to establish a rough valuation of the company [1][2] Valuation Methods - The Price-to-Earnings (PE) ratio is a common method for valuing bank shares, comparing the company's share price to its earnings per share [3] - A PE ratio of 15.9x for BOQ is calculated based on a share price of $6.52 and earnings per share of $0.41, which is lower than the banking sector average PE of 19x [5] - A sector-adjusted PE valuation for BOQ is estimated at $7.59 based on the average PE ratio of the banking sector [5] Dividend Discount Model (DDM) - The Dividend Discount Model (DDM) is a more 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] - A valuation of BOQ shares using a blended growth and risk rate yields an average valuation of $7.19, with an adjusted dividend payment increasing the valuation to $7.40 [10] Gross Dividend Valuation - Considering fully franked dividends, a gross dividend payment forecast of $0.50 results in a valuation of $10.57 for BOQ shares [11] Growth and Risk Rate Analysis - Various growth and risk rate scenarios indicate a wide range of potential valuations, with a 6% risk rate and 4% growth rate yielding a valuation of $17.50 [12] Additional Considerations - Further research is necessary to assess the sustainability of net interest margins and regulatory compliance for non-interest income [13] - The management team's culture and effectiveness are also critical factors in long-term investment decisions [13]