Which ASX bank share is the cheapest after earnings?

Which ASX 200 bank share is the cheapest on a P/E basis after earnings? Could it be Commonwealth Bank of Australia (ASX: CBA)?
The post Which ASX bank share is the cheapest after earnings? appeared first on The Motley Fool Australia. –

asx bank shares represented by large buidling with the word 'bank' on it

The ASX banks have been in the news a lot over the past couple of weeks. Like a lot. For starters, the S&P/ASX 200 Index (ASX: XJO) made a new all-time high this week. And seeing as the big four ASX banks dominate the largest weighted shares in the ASX 200, this has drawn interest (pardon the pun).

But perhaps the biggest reason why all eyes have been on the banks is good old fashioned earnings. Westpac Banking Corp (ASX: WBC), Australia and New Zealand Banking GrpLtd (ASX: ANZ) and National Australia Bank Ltd. (ASX: NAB) have all reported half-year earnings in the past fortnight. And just today, Commonwealth Bank of Australia (ASX: CBA) has delivered a quarterly update.

Since this was a chance to see how the banks are all bouncing back from the turmoil of last year, it was something of a watershed moment for the big four. And overall, investors seem to be impressed. That’s going off how bank share price appreciation was a large driver of the ASX 200 reaching its new record high.

But this gives us a good chance to take stock of the banks today. ASX shares, especially blue chip shares like the banks, are usually valued by the price-to-earnings (P/E) ratio metric. The P/E ratio is especially useful in comparing businesses that compete in the same sector too. And the banks have given us new ‘Es’ with their recent earnings reports. As such, it’s a good time to check out these new valuations. Before we start, it’s worth mentioning that the iShares Core S&P/ASX 200 ETF (ASX: IOZ) has the average P/E ratio of ASX 200 shares at 23.87 right now.

ASX bank shares get new P/Es

So, let’s begin with Commonwealth Bank. CBA currently has a P/E ratio of 21.08 with a share price (at the time of writing) of $94.79.

Westpac is sitting on 21.93 with a share price of $25.63.

ANZ is on a P/E of 16.22 at a price of $26.78.

And NAB is offering a P/E ratio of 20.28 at a share price of $26.43.

Ok, so on a pure earnings basis, Westpac is the most expensive bank, followed closely by CBA. Then we have NAB, and ANZ in last place by quite a distance. This tells us that the market is viewing ANZ in a less favourable light than the other banks, all other things being equal.

But that also means that ANZ is currently offering the largest dividend yield of the big four today, with 3.92% on the table at the current share price. I’ll leave you with that.

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.

See The 5 Stocks

*Returns as of February 15th 2021

More reading

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

The post Which ASX bank share is the cheapest after earnings? appeared first on The Motley Fool Australia.

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!