If you buy bank stocks, you may have to give up the idea of making huge profits in the short term, because the stock price of bank stocks is relatively stable and there are few big rises and big falls. Because of this, few investors who like to do short-term trading like to buy bank stocks. So, is it suitable for banks to use for long-term business operations?
Are bank stocks suitable for long-term investment?
Whether a stock is suitable for long-term development depends on whether the stock can exist for a long time. Whether a stock can exist for a long time is the key to whether a listed company can make stable profits. If a listed company has always been in a loss, it will not only be delisted, but its stocks will not have investment value. If you buy such stocks for a long time, you will be afraid that you will lose all your money in the end.
In terms of profitability, banks are relatively good. , especially several state-owned banks, is definitely one of the most profitable listed companies among A-share . Therefore, if you buy bank stocks and hold them for a long time, you don’t have to worry about being delisted.
Of course, ensuring that stocks will not be delisted is only one of the necessary conditions for long-term investment in stocks, and it cannot constitute a sufficient condition for . Because the purpose of investing in stocks is to make money, not just to ensure that you will not delist. So, from the perspective of making money, are bank stocks worth holding for a long time?
Whether you can make money by holding bank stocks for a long time depends on two aspects: on the one hand, whether the stock price can rise, and on the other hand, whether the dividend income is stable.
First of all, the stock price of bank stocks is likely to rise in the long run, but even if it rises, it will rise slowly. The reason why says that bank stocks are likely to rise is mainly because bank stocks have more profits and are relatively stable. Because as long as a listed company continues to make profits, the value of its stock will continue to rise, which will be reflected in its net assets per share.
For example, a bank stock with a price of 4.5 yuan has a net asset of 8 yuan per share, and its profit per share is about 1 yuan. If it has not distributed dividends and the profit remains at this level, then the net value per share will increase by 1 yuan per year, which will reach 18 yuan in 10 years and 28 yuan in 20 years.
At this time, will the stock price remain at 4.5 yuan in 10 or 20 years? Most likely not. Because its net assets have doubled by one or two times, it would be unreasonable if the stock price has not risen at all. Besides, if there are such cost-effective stocks, I believe many people will buy them. If there are more people buying them, the stock price will naturally rise.
However, although the probability of bank stocks rising for a long time is relatively high, the probability of a big rise is not very high, because the banking industry is already a very mature industry, which means that the development prospects of the banking industry are relatively small.
The development prospects of a company are precisely one of the important factors that drive the rise of its stock price. Without this factor, there will be no room for imagination in the returns of stock investment, which will be difficult to arouse the desire of most investors to buy stocks. If most investors don’t want to buy it, its stock price will be difficult to rise sharply.
Therefore, if you just want to make money, it is still more appropriate to invest in bank shares in for a long time, but if you want to make a lot of money, it is not very suitable.
Secondly, from the perspective of dividends, the dividend returns of bank stocks are still relatively high and relatively stable. Among the bank stocks listed on , they are basically profitable, and basically spend some of the profits to distribute dividends every year. If profits can continue, I believe that dividends will not be interrupted.
Some bank stocks have relatively high dividend ratios, which are much higher than bank deposit interest rates. After holding for 10-20 years, dividend income can exceed the principal. Therefore, if long-term holding of bank shares is mainly aimed at obtaining dividends, bank shares are still worth long-term investment.
