Commonwealth Bank of Australia (ASX:CBA) and the rest of the banks look set to offer generous yields over the next couple of years…
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Last week, three of the big four banks and Macquarie Group Ltd (ASX: MQG) released their respective results.
Much to the delight of income investors, all four of the banks reported significant improvements in their performances and made increases to their dividends.
Given that analysts have now had time to digest the results and make adjustments to their estimates, I thought I would take a look to see what dividend yields are on offer in the sector.
Here’s what I found:
Australia and New Zealand Banking GrpLtd (ASX: ANZ)
Analysts at Morgans are expecting some generous dividends from ANZ over the next two years. According to a note from last week, it is forecasting fully franked dividends per share of 145 cents and 163 cents in FY 2021 and FY 2022, respectively. With the ANZ share price currently fetching $27.75, this will mean yields of 5.2% and 5.9%.
Commonwealth Bank of Australia (ASX: CBA)
Commonwealth Bank is the only bank that hasn’t reported its results this month (its third quarter update is coming). However, that hasn’t stopped Citi from recently upgrading its forecasts. Late last month it forecast fully franked dividends of $3.45 per share in FY 2021 and $3.75 per share in FY 2022. Based on the current CBA share price of $93.92, this represents yields of 3.7% and 4%, respectively, over the next two years.
National Australia Bank Ltd (ASX: NAB)
According to a note out of Goldman Sachs, its analysts are forecasting fully franked dividends of 124 cents per share and 133 cents per share in FY 2021 and FY 2022, respectively. Based on the current NAB share price of $26.78, this will mean yields of 4.6% and 5%.
Westpac Banking Corp (ASX: WBC)
According to a note out of Morgan Stanley from last week, its analysts expect Westpac to pay fully franked dividends per share of $1.18 and $1.25 over the next two years. Based on the latest Westpac share price of $26.09, this will mean yields of 4.5% and 4.8%.
Finally, this investment bank declared a full year dividend of $4.70 per share last week. Looking ahead, a recent note out of Morgan Stanley reveals that it is expecting Macquarie to increase this to $5.90 per share in FY 2022. With the Macquarie share price ending the week at $158.45, these dividends represent partially franked yields of 3% and 3.7%.
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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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.
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