Westpac Banking vs ANZ Which Is More Profitable?

Westpac Banking Corporation and Australia and New Zealand Banking Group Limited (ANZ) are two of the biggest banks in Australia, each with a significant presence in the financial market. Both banks offer a range of financial products and services, including retail and commercial banking, wealth management, and investment banking. Investors looking to invest in the banking sector often compare Westpac and ANZ stocks to determine which offers better potential for returns and growth. Let's analyze the differences and similarities between these two banking giants.

Westpac Banking or ANZ?

When comparing Westpac Banking and ANZ, 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 Westpac Banking and ANZ.

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. Westpac Banking has a dividend yield of 5.46%, while ANZ has a dividend yield of 5.4%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Westpac Banking reports a 5-year dividend growth of -9.71% year and a payout ratio of 59.78%. On the other hand, ANZ reports a 5-year dividend growth of -0.31% year and a payout ratio of 74.52%.

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 Westpac Banking P/E ratio at 12.38 and ANZ's P/E ratio at 13.90. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Westpac Banking P/B ratio is 1.42 while ANZ's P/B ratio is 1.37.

Growth Investors:

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

Retail Investors:

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