Franked Dividends of the banks
My question is that ANZ is one of your most favoured banks yet it does not pay a fully franked divided. What am I missing? Regards Ray
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Answer
Hi Raymond,
We like ANZ Group (ASX:ANZ) for the combination of yield and potential capital growth hence it resides in our Active Growth and Active Income Portfolios. Of the “Big Four Banks” ANZ has been the shining light over the last year from a share price perspective:
- ANZ +39%, Westpac +34%, NAB +34%, and CBA +16%.
Sure, it only yields around ~4.5% part franked (70%) but compared to NAB 4% fully franked (FF), Westpac 3.9% FF, and CBA 2.8% FF it’s still at the pointy end from a yield perspective when grossed up. We also expect ANZ’s franking to drift higher over time.
We like the strategic reset of ANZ laid out by new CEO Nuno Matos last year with the focus now shifting squarely to targeting a ROTE (return on equity excluding intangibles) of 12% by FY28 and 13% by FY30, and a cost-to-income ratio in the mid-40s through structural simplification, digital transformation, and cultural change.
- In other words, we continue to see ANZ with the best sell help story compared to its peers.
