ANZ vs Westpac Banking Which Should You Buy?

ANZ and Westpac are two major players in the Australian banking sector, each with a long history and significant market share. Both companies offer a range of financial services to customers, including retail banking, corporate banking, and wealth management. In recent years, both ANZ and Westpac have faced challenges such as regulatory scrutiny, economic uncertainty, and technological disruption. Investors are closely watching the performance of these two banking giants to determine which one presents a more attractive investment opportunity.

ANZ or Westpac Banking?

When comparing ANZ and Westpac Banking, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between ANZ and Westpac Banking.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. ANZ has a dividend yield of 5.4%, while Westpac Banking has a dividend yield of 5.46%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. ANZ reports a 5-year dividend growth of -0.31% year and a payout ratio of 74.52%. On the other hand, Westpac Banking reports a 5-year dividend growth of -9.71% year and a payout ratio of 59.78%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with ANZ P/E ratio at 13.90 and Westpac Banking's P/E ratio at 12.38. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. ANZ P/B ratio is 1.37 while Westpac Banking's P/B ratio is 1.42.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, ANZ has seen a 5-year revenue growth of 0.11%, while Westpac Banking's is -0.01%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with ANZ's ROE at 9.95% and Westpac Banking's ROE at 11.49%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $21.14 for ANZ and $19.55 for Westpac Banking. Over the past year, ANZ's prices ranged from $15.60 to $22.29, with a yearly change of 42.88%. Westpac Banking's prices fluctuated between $13.21 and $23.28, with a yearly change of 76.23%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.