Bell Potter has named Australia and New Zealand Banking GrpLtd (ASX:ANZ) and these ASX bank shares as the ones to buy in 2021. Here’s why…
The post Leading broker names the ASX bank shares to buy in 2021 appeared first on The Motley Fool Australia. –
Analysts at Bell Potter have been busy finding ASX shares from several industries that they believe are best placed to have a strong 2021.
On this occasion, I’m going to look at the banking and financial sector. Here are a few shares they rate highly:
Australia and New Zealand Banking GrpLtd (ASX: ANZ)
Bell Potter’s favourite major bank is ANZ due partly to its belief that there is greater upside for its dividends compared to peers. It has a buy rating and $24.50 price target on its shares.
The broker explained: “FY20 performance may have been impacted by large notable items and COVID-19 provisions but underlying performance was sound and included a better outcome in 2H20.”
“With a normalised target payout ratio lower than those of its peers, we believe there is greater upside for ANZ to increase dividends and especially when APRA relaxes its current payout restriction. Credit provisions are higher than the sector average and support the potential for write-backs.”
Auswide Bank Ltd (ASX: ABA)
Another (smaller) bank that the broker is positive on is Auswide Bank. It currently has a buy rating and $6.70 price target on its shares. Bell Potter has been pleased with its performance in FY 2021 and notes that it is outperforming its larger peers.
It commented: “ABA provided an upbeat four month trading update with earnings momentum having further strengthened since the end of 1Q21 and performance indicators that are sector-beating.”
“This represents a dream start to FY21 that should comfortably ensure an unbroken track record for ABA in generating profitable growth. All FY21 targets are set to be exceeded.”
Macquarie Group Ltd (ASX: MQG)
Finally, this investment bank is the broker’s favourite in the sector. Bell Potter has a buy rating and $150.00 price target on its shares. It notes that its business model has positioned it for growth in the future.
Bell Potter explained: “Looking past the COVID-19 noise, this longer term “Cash and Growth” story remains intact. The way MQG’s business model is split across annuity-style and markets-facing activities – respectively 70% and 30% of net profit contribution – strengthens resilience in withstanding market volatility and improves flexibility in being able to capitalise on higher risk-adjusted return opportunities when operating conditions normalise.”
Another positive in Bell Potter’s eyes is its strong capital adequacy. It notes that this is being underpinned by its strong organic capital generation and efficient asset utilisation.
Where to invest $1,000 right now
When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*
Scott just revealed what he believes are the five best ASX stocks for investors to buy right now. These stocks are trading at dirt-cheap prices and Scott thinks they are great buys right now.
*Returns as of June 30th
- Bell Potter names the ASX shares to buy in 2021
- Why ANZ, Westpac, and the rest of the big four are storming higher today
- These are the latest 2021 ASX “buy” ideas from top brokers
- ASX 200 up 1.55%: ANZ & Westpac surge higher, Afterpay & Xero tumble
- 2 blue chip ASX dividend shares to buy
Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
The post Leading broker names the ASX bank shares to buy in 2021 appeared first on The Motley Fool Australia.