Australia and New Zealand Banking Group Limited (ASX:ANZ): 4 Days To Buy Before The Ex-Dividend Date
Have you been keeping an eye on Australia and New Zealand Banking Group Limited’s (ASX:ANZ) upcoming dividend of AU$0.80 per share payable on the 18 December 2018? Then you only have 4 days left before the stock starts trading ex-dividend on the 12 November 2018. Is this future income stream a compelling catalyst for dividend investors to think about the stock as an investment today? Let’s take a look at Australia and New Zealand Banking Group’s most recent financial data to examine its dividend characteristics in more detail.
Check out our latest analysis for Australia and New Zealand Banking Group
5 checks you should use to assess a dividend stock
When researching a dividend stock, I always follow the following screening criteria:
Is it the top 25% annual dividend yield payer?
Has it consistently paid a stable dividend without missing a payment or drastically cutting payout?
Has the amount of dividend per share grown over the past?
Is is able to pay the current rate of dividends from its earnings?
Will it have the ability to keep paying its dividends going forward?
Does Australia and New Zealand Banking Group pass our checks?
The company currently pays out 65% of its earnings as a dividend, according to its trailing twelve-month data, which means that the dividend is covered by earnings. Going forward, analysts expect ANZ’s payout to remain around the same level at 68% of its earnings, which leads to a dividend yield of around 6.4%. Moreover, EPS is forecasted to fall to A$2.37 in the upcoming year.
If you want to dive deeper into the sustainability of a certain payout ratio, you may wish to consider the cash flow of the business. Cash flow is important because companies with strong cash flow can usually sustain higher payout ratios.
Reliablity is an important factor for dividend stocks, particularly for income investors who want a strong track record of payment and a positive outlook for future payout. Although ANZ’s per share payments have increased in the past 10 years, it has not been a completely smooth ride. Investors have seen reductions in the dividend per share in the past, although, it has picked up again.
In terms of its peers, Australia and New Zealand Banking Group produces a yield of 6.1%, which is on the low-side for Banks stocks.
Next Steps:
With these dividend metrics in mind, I definitely rank Australia and New Zealand Banking Group as a strong income stock, and is worth further research for anyone who considers dividends an important part of their portfolio strategy. Given that this is purely a dividend analysis, I urge potential investors to try and get a good understanding of the underlying business and its fundamentals before deciding on an investment. Below, I’ve compiled three relevant factors you should further research:
Future Outlook: What are well-informed industry analysts predicting for ANZ’s future growth? Take a look at our free research report of analyst consensus for ANZ’s outlook.
Valuation: What is ANZ worth today? Even if the stock is a cash cow, it’s not worth an infinite price. The intrinsic value infographic in our free research report helps visualize whether ANZ is currently mispriced by the market.
Other Dividend Rockstars: Are there better dividend payers with stronger fundamentals out there? Check out our free list of these great stocks here.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
