Current Analysis: UBS Group

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UBS Group AG (UBS) is the world’s largest wealth manager and has been the product of multiple mergers over the years. Apart from wealth and asset management, it operates a universal bank in Switzerland and a global investment bank.

The company was formerly known as UBS AG and changed its name to UBS Group AG in December 2014.

UBS Group AG was founded in 1862 and is based in Zurich, Switzerland.

Three key data points gauge UBS Group AG or any dividend-paying firm.

The key three are:

(1) Price

(2) Dividends

(3) Returns

Those three basic keys best tell whether any company has made, is making, and will make money.

UBS Price

Over the past year, UBS’s share price rose about 59% from $16.14 to $25.66 as of Thursday’s market close.

If UBS stock trades in the range of $15.00 to $35.00 this next year, its recent $25.66 share price might rise to $31.00 by next year. Of course, UBS’s price could drop about the same $5.34 estimated amount or more.

My upside estimate of $5.34, however, is $0.82 under the median of one-year target prices forecast by three analysts covering UBS for brokers.

UBS Dividend

UBS Group AG has paid variable annual dividends since May 10, 2012. UBS’s most recent Annual dividend, paid April 14th to shareholders of record April 12th, was $0.55. That annual return of $0.55 casts a forward yield of 2.14% per Thursday’s closing price.

UBS Returns

Add the $0.55 anticipated annual dividend to UBS Group's estimated $5.34 possible price upside, revealing a $5.89 potential gross gain per share for the coming year.

At Thursday’s $25.66 closing price, a little over $1000 would buy 39 shares.

A $10 broker fee (if charged), paid half at purchase and half at sale, might cost us about $0.26 per share.

Subtracting that maybe $0.26 brokerage cost from my estimated $5.89 gross gain per share makes a net gain of $5.63 X 39 shares = $219.57 or about a 21.9% net gain.

This could be the time to pounce on UBS Group AG shares on a pullback. But beware, UBS is an established banking firm doing business in a volatile environment. Furthermore, the estimated $21.40 dividend from $1000 invested comes in at $4.26 below the recent $25.66 single share price. The choice is yours but wait for UBS price to drop to $23.45 before you pounce. At that price, the annual dividend from $1k invested will equal the single share price.

Remember the true value of any stock is best realized by your personal ownership of shares.

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Disclaimer:  This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a ...

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