ANZ share price with Mike Smith

Source: Yahoo Finance

With ANZ shares currently trading around $26 there is a distinct possibility the shares will end lower than when Mike Smith commenced in 2007.  As compared to the impressive run under the previous CEO John McFarlane.

WBC share price on the rise

This graph shows the comparative performance of WBC, CBA, NAB and ANZ since July 1st.

Source: Google Finance

Westpac (WBC) is the clear leader with its share price now higher than where it was on July 1st.
ANZ by comparison is still lower by 13%

ANZ dividend yield falls to 6.5%

After touching a low of $25.01 in early November the ANZ share price has rallied over 10% and is currently almost reaching $28.  Reasonable GDP figures today will help all the big four banks.

November 10th:  Dividend yield 7.2% and PE 9.3

December 2nd:  Dividend yield 6.5% and PE 10.3

Dividend yields of top 10 ASX

1.   BHP    9%
2.   NAB   6.6%
3.   ANZ   6.5%
4.   WBC  5.7%
5.   WOW 5.7%
6.   TLS    5.6%
7.   CBA   5.2%
8.   WES   5.2%
9.   MQG  4.4%
10. CSL    1.6%

• BHP leads the list with the growing likelihood that its dividend will be cut.  A decision on this is not expected until February and commodity prices can fluctuate dramatically in the space of two or three months
• NAB and ANZ have yields of about 6.5%.  There is also talk that their dividends could be cut due to the large capital raisings this year.  This is looking increasingly unlikely in the short term as their share prices have rallied over the last couple of weeks.
• WOW 5.7%.  Who knows what will happen with WOW.  Who will the new CEO be? What will happen to Masters?  What will happen to Big W?  Will second quarter sales be positive?  
• MQG and CSL with lower yields have been by far the best share price performers over the year.

Top 10 ASX by market cap - November changes

                 Nov 9th         Nov 30th

1.   CBA     130b              136b

2.   WBC    100b              107b

3.   ANZ     74b                79b

4.   NAB     74b                78b

5.   TLS      64b                66b

6.   BHP     70b                59b

7.   CSL     44b                46b

8.   WES    43b                43b

9.   WOW   30b                30b

10. MQG    27b                28b

• The big four banks have all increased their market cap over the last three weeks.
• ANZ has just edged ahead of NAB
• BHP has lost 11b in market cap in the last three weeks
• WES and WOW both remain unchanged.

15 year return on BHP, ANZ and WOW

Three different companies in three completely different sectors: Mining, banking and retail.  All currently experiencing their own headwinds and difficulties.  Which has performed best over the long term?

ANZ

Source: Yahoo Finance

WOW

Source: Yahoo Finance

BHP

Source: Yahoo Finance

If measured from the year 2000 then Woolworths (WOW) is a long way ahead of ANZ and BHP.
WOW has increased its share price five fold and don't forget the dividends as well.  ANZ and BHP have increased their share price roughly half as much as Woolworths (WOW)

When measured from 2005 the results are much the same.  Woolworths (WOW) has risen 60% where as ANZ and BHP have only risen 30%.

From 2010 everything has changed.  ANZ is up a bit, WOW is down a bit and BHP is down a lot.

Highs and lows of ANZ since 2000

Source: Yahoo Finance 

From 2000 it took seven years for ANZ to triple in price from $10 to $30 (pre GFC high)

From 2009 (GFC low) it only took six years to triple in price from $12 to $36.

Hardly surprising there has been a pull-back from the highs seen earlier in the year.

Top 10 ASX by market cap

1. CBA 130b
2. WBC 100b
3. NAB 74b
4. ANZ 74b
5. BHP 70b
6. TLS 64b
7. CSL 44b
8. WES 43b
9. WOW 30b
10. MQG 27b

• The big four banks still easily account for the bulk of the market.
• ANZ has slipped the most of the four banks
• BHP has fallen from 2nd to 5th in a year (share price down 30% in a year)
• Macquarie (MQG) the biggest gain (share price up 30% in a year)
• CSL continues to move up (share price up 20% in a year)

ANZ NAB WBC ex dividend dates approaching

With the full year results finished for three of the big four banks that means ex-dividend dates are fast approaching.  As has been noted previously there has been no run up in their share prices this year as return on equity slips, dividends remain stable and margins come under pressure.

Clancy Yeates and James Eyers writing for BusinessDay have summarised it all pretty neatly this morning.  They've included a few useful graphs looking at return on equity, net interest margins and bad debt expenses going back a number of years.

ANZ
Ex dividend date 5th Nov 2015
PE ratio down to 10
Dividend yield 6.7% fully franked

NAB 
Ex dividend date tomorrow (4th Nov 2015)
PE ratio 12
Dividend yield 6.6% fully franked

WBC
Ex dividend date 10th Nov 2015
PE ratio 13
Dividend yield 6% fully franked

ANZ continues to offer the best value and some would argue the higher risk.
Unless ANZ has a bit of a bounce today or tomorrow its share price could be testing its 52 week low later in the week.

Westpac results - No surprises here

Westpac today rounds off the full year results after ANZ and NAB last week.

• Cash earnings $7.82 billion up 3%
• Final dividend 94c per share fully franked
• Return on equity 15.8% down 57 basis points

No surprises as most of the results were released two weeks ago when it announced the equity raising.

On Friday we had a look at how the share prices of ANZ and NAB were responding to their respective results.  They each lost 2% on the day the results were announced and then had steeper falls the following day.  And today Westpac is following the same formula being down 2%.  Maybe some steeper falls tomorrow?


Despite this, their shares are still trading comfortably above the retail entitlement offer price of $25.50.

Final musing:  Return on equity may be down a bit but 15.8% is still pretty healthy.

ANZ matches NAB's falls

After chewing over the ANZ results for a day it appears everyone has a bit of indigestion with the share price sliding over 3% today.  Yesterday I jumped the gun by declaring that the ANZ results were being a little better received than NAB due to the more modest share price fall.

Source: Google Finance

So as the above chart shows from a share price perspective they are both being marked down by a similar amount.  Interesting to note that they both had bigger falls the day after they released their results.

ANZ full year result

Judging by the share price movements one can assume that ANZ's full year result is being received better than the NAB full year result from Wednesday.  NAB is down 6% in the space of two days where as ANZ is down 2% upon the release of their results today.

Source: Google Finance

ANZ 2015 full year results at a glance:

• Cash earnings up 1%
• Final dividend 95c fully franked
• Return on equity 14%

Bank dividend yields

Yesterday we looked at the PE ratios of CBA, WBC, NAB and ANZ and noted that ANZ is lagging behind the other three.  Whether it is a sign of good value or trouble ahead for ANZ is the question.

So what about their dividend yields.

1. ANZ 6.3%
2. NAB 6.2%
3. WBC 5.8%
4. CBA 5.4%

ANZ is certainly struggling for sentiment in the market with the lowest PE ratio and the highest dividend yield.

Ex-dividend dates are approaching for ANZ, NAB and WBC.  The traditional run-up of share price leading up to the ex-dividend date seems rather lack lustre this year.  One wonders whether yields of ANZ and NAB could soon be approaching 7%.

CBA still appears to be in a class of its own.  Its return on equity is still well ahead of NAB, WBC and ANZ.

What will NAB reveal tomorrow?

Full year results for NAB tomorrow (Wednesday 28th October 2015).

Should be no surprises with the dividend with it already being confirmed that it will remain at 99c fully franked.

Net interest margins and levels of bad debts will no doubt be closely scrutinised.

More interesting will be the "material transaction" to be unveiled.  Various media outlets seem convinced that it will be the sale of a large part of the life insurance business which drags down the results by being too capital intensive.

And there will be more details on the spin off of Clydesdale and Yorkshire banks in the UK.  With the UK economy improving one can imagine that they will be quietly confident.

Clydesdale and Yorkshire have always been blamed for NAB's chronic underperformance.  As the chart below going back 15 years of CBA, NAB and S&P/ASX200 shows.

Source: Google Finance

There has been high optimism for NAB this year with Andrew Thorburn bringing about change at a rapid rate.  So has this optimism been reflected in the share price?  Let's look at the same chart going back only six months to April of this year.  This is where the index peaked in 2015 so we are really looking at who minimised their losses the most.

Source: Google Finance

As can be seen NAB and CBA have both performed in a similar fashion losing roughly 15% since April.

The PE ratios of the big four banks also tells an interesting story.  CBA, WBC and NAB all have a PE ratio of 13 to 14 where as ANZ has a PE ratio of 10.

With NAB about to say goodbye to its UK operations its PE has joined CBA and WBC.

ANZ with its vast Asian operations is trading at a discount to CBA, WBC and NAB.

Will the problems NAB has endured be ANZ's problems of tomorrow?

ANZ share snippets

The year so far...

Peaked on April 7th at $37.25

Trough on September 29th at $26.38

Source: Google Finance

Where as the S&P/ASX 200 is roughly where it started the calendar year ANZ is still down 10%.

Source: Google Finance

The 52 week range $26.38 to $37.25 -  representing $11 from peak to trough is the largest range since the GFC in 2009.

Ex dividend date in a couple of weeks.  Dividend yield currently 6.3% (100% franking)

10 year return on CBA, WBC, ANZ, NAB

Most market commentary is based on the short term.  Up one day, down the next or percentage returns for the year.  Let's look further back...  say 10 years for example.
10 years ago takes us to October 2005.  GFC is still a few years off.
These are the percentage returns (excluding dividends and franking) over a 10 year period.

Source: Google Finance

Was interesting to see how they are currently nicely spaced apart.

• NAB has gone nowhere over 10 years
• ANZ is up about 25% over 10 years
• WBC is up about 50% over 10 years
• CBA is up about 100% over 10 years

Banks show steady gains after raisings.

And so Westpac (WBC) is the final of the big four to conduct their $3.5bn entitlement offer.
Surprised a few by sneaking it in before the annual results.  Raising fairly small amount at offer price of $25.50 on a 1 for 23 basis.

So how are NAB, CBA and ANZ travelling after their raisings?

• NAB offer price $28.50   Currently up over 10%
• CBA offer price $71.50   Currently up over 7%
• ANZ offer price $26.50   Currently up over 8%

With sentiment in the market slowly improving one imagines demand for WBC will be fairly high.