The smallest of the four provides the biggest returns…
The post ANZ (ASX:ANZ) share price takes the cake among big four bank shares appeared first on The Motley Fool Australia. –
The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price has delivered the goods for shareholders over the past year. To the surprise of some investors, the smallest of the big four bank shares on the ASX has produced the biggest gains.
Over the past 12 months, the ANZ share price pulled a 49.6% return. Comparatively, the biggest bank, Commonwealth Bank of Australia (ASX: CBA) gained 40%. The next closest to ANZ was the National Australia Bank Ltd (ASX: NAB) share price, climbing 43.5% over the period.
Let’s look at what possibly put the ANZ bank out as the leading racehorse in the past year.
Catching the property boom
According to the bank’s first-half report for FY21, Statutory profit after tax for the half-year was $2.9 billion, up 45% on the previous half. Continuing cash profit was up 28% to $2.99 billion.
This strong result was in part thanks to the snapback in the economy which has seen excess income flowing into the property market. It appears ANZ made the most of this, becoming the third-largest home lender in the Australian market.
Illustrating this uptick, the bank reported Australian new home loan accounts of 92,000. This represents a 43.8% increase from the prior corresponding period.
Additionally, the bank increased its capital buffer to 12.4% while also lifting dividend payments. Analysts at Morgans noted the profit and dividend were larger than expected. As a result, the broker maintains a bullish sentiment with a target of $34.50 on the ANZ share price.
Other analysts take on the ANZ share price
Not all brokers are as optimistic on ANZ shares as Morgans. Analysts at Macquarie Group Ltd (ASX: MQG) are concerned about the bank’s core earnings (excluding provisions) continue to decline.
Although, Macquarie’s analysts are expecting dividends to recover to $1.40 per share in FY21. This likely has dividend investors foaming at the mouth, with the potential payment translating to a yield of 4.98% based on the current ANZ share price.
Incidentally, these forecasts of juicy dividends align with the expectations voiced by asset manager Janus Henderson Group CDI (ASX: JHG) yesterday. In our coverage, the asset manager painted a depiction of future flowing dividend streams.
Should you invest $1,000 in ANZ right now?
Before you consider ANZ, you’ll want to hear this.
Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and ANZ wasn’t one of them.
The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.
*Returns as of May 24th 2021
NAB (ASX:NAB) share price up following prediction of no rate hike until 2024
2 buy-rated ASX dividend shares for income investors
Is the CBA (ASX:CBA) share price worth buying at $100?
CBA (ASX:CBA) economists expect inflation sooner than RBA
Forget CBA! Here are the 5 best performing ASX bank shares of FY21
Motley Fool contributor Mitchell Lawler owns shares of Commonwealth Bank of Australia. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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.