Investors should buy First Gulf Bank PJSC (FGB) shares before year end as the lender controlled by Abu Dhabi’s ruling family will offer a 7 percent dividend yield, JPMorgan Chase & Co. (JPM) said, raising its price estimate.
JPMorgan, which has a buy rating on the stock, increased its price forecast for the Abu Dhabi-based lender’s shares to 13.5 dirhams from 13 dirhams, analysts including Naresh Bilandani said in a report dated Oct. 19. That represents a 36 percent upside from last week’s closing price.
The analysts’ projected dividend yield for First Gulf Bank exceeds the 4.6 percent average for banks traded on the benchmark ADX General Index (ADSMI), according to data compiled by Bloomberg. Shares of First Gulf Bank have rallied 29 percent this year through Oct. 18, compared with a 10 percent advance for the Abu Dhabi gauge and a 13 percent gain for the ADX Banks Index. (ADBF) First Gulf Bank trades at 7.7 times earnings compared with 9.3 times for Abu Dhabi’s measure.
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