The Australia and New Zealand Banking Group Ltd (ASX:ANZ) share price is going from strength to strength. Something to do with dividends?
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The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price continues to light up the ASX today. At the time of writing, ANZ shares are up 0.97% to $29.17 a share. Earlier in the trading day, the ANZ share price hit $29.35 — a new 52-week high. In fact, that share price is the highest ANZ has climbed since August 2018, a good 2½ years ago. It has also climbed more than 108% since it’s last 52-week low, which was of course hit during the coronavirus-induced market crash last year.
It’s a surprisingly strong move from this ASX bank. ANZ’s big four banking compatriots have also been enjoying rising valuations over the past few months, but none as enthusiastic as ANZ. As an example, Westpac Banking Corp (ASX: WBC) shares are still down a good 17% from where they were in August 2018.
Last week, we discussed some of the reasons why ASX banking investors might be targeting ANZ over the other ASX banks. Possible reasons include the lack of a capital raise program last year during the worst throes of the market crash. They also include the lack of a $1.3 billion fine, which Westpac copped.
But what about dividends? Many (arguably most) investors who seek out ASX bank shares do so for the dividends.
ANZ’s dividend record
Well, on the surface, ANZ’s most recent dividend payouts don’t look too impressive. Yes, the bank did pay 2 fully franked dividends last year (unlike Westpac). But those 2 dividends amounted to 60 cents per share. That is well down from the $1.60 per share that investors received back in 2019.
That gives the ANZ share price a trailing dividend yield of 2.06% on current pricing.
But perhaps investors are looking forwards, not backwards.
As my Fool colleague James Mickleboro reported a fortnight ago, several brokers are forecasting that ANZ will pay as much as $1.48 in dividends per share in FY2021, and as much as $1.61 in FY2022. If that did come to pass, it would mean investors are looking at a forward yield of 5-6%. That would certainly be a tantalising prospect in this era of near-zero interest rates.
Whatever the reason, investors can’t seem to get enough of ANZ shares these days. The company is still well below its all-time high of near $37 a share that we saw back in 2015. However, it’s a lot closer today than it has been for a long time. But here’s another (more sobering) statistic: any investor who bought ANZ shares back in February 2007 is only breaking even on their investment at today’s share price.
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Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.