The Australia and New Zealand Banking Group Ltd (ASX: ANZ) share price represents the best-value buy out of the S&P/ASX 200 Index (ASX: XJO) big four banks, according to one expert.
The ANZ share price is $24.46 at the time of writing, 0.16% lower than its previous close.
For comparison, the ASX 200 is currently up 0.07%, while the S&P/ASX 200 Financials Index (ASX: XFJ) has slipped 0.18%.
So, what might make the smallest of the big four banks a better buy than its peers? Let’s take a look.
ANZ represents best value of big four banks: expert
The ANZ share price represents better value than those of the three other ASX 200 big four banks, Baker Young managed portfolio analyst Toby Grimm says.
Indeed, the stock offers the lowest price-to-earnings (P/E) ratio while its dividends outpace those of its peers, the analyst said, courtesy of The Bull, as he labelled ANZ shares a buy.
ANZ posted 223.8 cents of earnings per share (EPS) over the 12 months ended 31 March. That sees it trading with a P/E ratio of 10.8x at the time of writing.
The smallest of the bunch has also offered investors $1.44 per share in dividends over the 12 months just been.
That leaves the bank boasting a 5.88% dividend yield. That is, again, the best of the big four banks.
And if you think that’s all Grimm likes about the ANZ share price, you’d be mistaken. He continued, as per The Bull:
The decision to expand core operations via the Suncorp Bank acquisition reduces risk and supports medium term growth.
As it announced in July, ANZ is planning to acquire Suncorp Group Ltd (ASX: SUN)’s banking division for $4.9 billion.
Speaking on the purchase, ANZ CEO Shayne Elliott said, “this will result in a stronger, more balanced bank for customers and shareholders”.
Finally, Grimm tips net interest margin (NIM) expansion will likely underpin the bank’s full-year earnings, set to be released later this month.
The Reserve Bank of Australia has hiked interest rates to 2.6% this year.
While such hikes present certain risks to banks and their loan books, they also allow them to reprice their loan offerings, thereby increasing their profits.
ANZ share price snapshot
Sadly, the ANZ share price has been underperforming its big four bank peers this year.
The stock has dumped nearly 12% since the start of 2022. It’s also trading 10% lower than it was this time last year.
Meanwhile, the ASX 200 has fallen 10% year to date and 6% over the last 12 months.
The post ANZ share price best-value buy of the ASX 200 big four banks right now: expert appeared first on The Motley Fool Australia.
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Motley Fool contributor Brooke Cooper 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.
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