Are ANZ shares a good buy for passive income?

ANZ Group Holdings Ltd (ASX: ANZ) shares have sunk lower on Wednesday afternoon. At the time of writing, the major bank’s shares are down 1.88% to $34.48 a piece.

Today’s drop comes off the back of a run of share price declines. Over the past week, ANZ shares have tumbled 7%. 

The bank shares are now down 5% for the year to date, but are still 21% higher than this time 12 months ago.

Analysts are uncertain about the outlook for the shares, too. TradingView data shows that half (8 out of 16) have a hold rating on ANZ shares. Another 6 have a buy or strong buy rating, and two have a sell or strong sell rating on the stock.

The average $35.54 target price implies a small 3% potential upside over the next 12 months. However, there is a large swing between the maximum and minimum target prices.

Some think the shares could tumble another 28% to $24.96, while others think the share price could climb 20% higher to $41.50 each.

The outlook for ANZ shares might look uncertain this year, but what about the bank’s passive income?

Are ANZ shares a good play for passive income?

As one of Australia’s big four major banks, ANZ is generally considered to have stable earnings and predictable cash flow. 

While bank stocks are usually considered cyclical, ANZ’s strong deposit base and diversified portfolio mean it is also relatively defensive in nature.

In early May, the bank reported a 70% jump in its cash profit for the first half of FY26. Statutory profit was also up 62%, operating income was up 3%, and the bank’s operating expenses were 22% lower.

ANZ confirmed it has now achieved 49% of its gross cost-savings target of $800 million for FY 2026.

The bank’s performance means it is able to make a reliable and regular dividend payment to shareholders every six months, payable in July and December. 

It also offers both a dividend reinvestment plan (DRP) and a bonus option plan (BOP) as alternatives to receiving cash dividends on ANZ ordinary shares.

At the same time as its latest results announcement, ANZ also confirmed an 83-cent per share dividend payment, franked at 75%, to be paid to shareholders in July. This translates to a forward dividend yield of around 4.8%.

The 83-cent dividend is the same payout that investors have been receiving every six months since July 2024. Although the latest payout will receive an additional 5% franking (previously 70%).

Passive income investors will be pleased, though. CommSec expects that ANZ will pay an annual dividend per share of $1.68 in FY26. This translates to a 4.87% dividend yield at the time of writing. The broker thinks the dividend will keep climbing too, to $1.72 per share in FY27.

That’s a decent passive income. It also puts ANZ at the front of the pack with the highest dividend yield offering among the big 4 major banks. 

The post Are ANZ shares a good buy for passive income? appeared first on The Motley Fool Australia.

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• Why are ANZ shares sinking today?
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Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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 Scott Phillips.