The Westpac (ASX:WBC) share price is up 30% so far in 2021. Here’s why

Why have Westpac shares enjoyed a wonderful 2021 so far?
The post The Westpac (ASX:WBC) share price is up 30% so far in 2021. Here’s why appeared first on The Motley Fool Australia. –

As most ASX investors would be at least somewhat aware of, the S&P/ASX 200 Index (ASX: XJO) has enjoyed a very decent run of returns in 2021 so far despite the recent bout of market volatility. The ASX 200 closed today up a miserly 0.07% to 7,367 points, placing its year to date gains at a still-robust 11%. But how has the Westpac Banking Corp (ASX: WBC) share price fared?

Westpac is, of course, one of the ASX 200’s major shares, as well as being one of the big four ASX banks. It hasn’t exactly amassed a reputation as a consistent market-beating share either. You could have bought Westpac shares for their current price of $25.56 way back in 2007. That’s a long time to go nowhere.

But let’s not dwell on Westpac’s past and focus on the bumper year shareholders have enjoyed in 2021 so far. Westpac has managed to deliver a year to date gain for investors of 30.36%. That’s roughly triple what the ASX 200 has delivered over the same period.

It also tops the other major ASX banks. Commonwealth Bank of Australia (ASX: CBA) has ‘only’ returned 23.8% year to date so far. National Australia Bank Ltd (ASX: NAB) and Australia and New Zealand Banking Group Ltd (ASX: ANZ) are up 25.1% and 22.5% respectively.

So why this outperformance from Westpac?

Westpac share price tops ASX banking shares in 2021 so far

To understand that, let’s go back to the horror year this bank had in 2020. Firstly, we had the coronavirus-induced share market crash. Like most ASX shares, Westpac suffered heavily in the early months of 2020, falling more than 40% between 20 February and 23 March.

Westpac was also the only big four bank to entirely write off its 2020 interim dividend. The other banks delayed their payments but Westpac skipped its payout entirely, the first time it had done so in decades.

Not only did shareholders have to contend with a skipped dividend but Westpac’s finances were also dealt a further blow when it received a $1.3 billion fine in September for breaching anti-money laundering laws.

These factors may have contributed to Westpac being the worst-performing ASX bank share out of the entire sector (not just the big four) in 2020.

But perhaps Westpac’s wooden spoon last year has helped it regain the most ground in 2021 so far. The bank has indeed had a relatively pleasing year. Biannual dividends have been restored and Westpac’s interim dividend for 2021 came in at 58 cents per share, a good 87% above last year’s final payment.

Then, in August, Westpac flagged that it might be considering a potential capital return program, possibly via a share buyback.

It’s these positive developments, helped no doubt by the contrast with Westpac’s horror 2020, that may have helped give shareholders a 30% capital return on Westpac shares in 20201 thus far.

At the current Westpac share price, this ASX bank has a market capitalisation of $93.84 billion and a dividend yield of 3.48%.

The post The Westpac (ASX:WBC) share price is up 30% so far in 2021. Here’s why appeared first on The Motley Fool Australia.

Should you invest $1,000 in Westpac right now?

Before you consider Westpac, 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 Westpac 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 August 16th 2021

More reading

Here are the top 10 ASX shares today

These 3 ASX 200 shares are topping the volume charts this Monday

Why is the WAM Capital (ASX:WAM) share price sliding 4% today?

2 gold ASX shares experts are loving right now

ASX 200 (ASX:XJO) midday update: Aristocrat’s $5bn acquisition, Zip falls on Q1 update

Motley Fool contributor Sebastian Bowen owns shares of National Australia Bank Limited. 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.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!