Australia and New Zealand Banking Group Limited, together with its subsidiaries, provides various banking and financial products and services to individual and business customers. More info.
The calculations below outline how an intrinsic value for Australia and New Zealand Banking Group is arrived at using the Excess Return Model. This approach is used for finance firms where free cash flow is difficult to estimate.
In the Excess Return Model the value of a firm can be written as the sum of capital invested currently in the firm and the present value of excess returns that the firm expects to make in the future.
The model is sensitive to the Return on Equity of the company versus the Cost of Equity, how these are calculated is detailed below the main calculation.
Note the calculations below are per share.
See our documentation to learn about this calculation.
Excess Returns = (Stable Return on equity – Cost of equity) (Book Value of Equity per share)
A$0.68 = (11.74% – 8.55%) * A$21.43)
Terminal Value of Excess Returns = Excess Returns / (Cost of Equity - Expected Growth Rate)
A$11.80 = A$0.68 / (8.55% - 2.76%)
Value of Equity = Book Value per share + Terminal Value of Excess Returns
A$33.23 = A$21.43 + A$11.80Inputs used in model:
Stable EPS = Stable Book Value * Return on Equity
A$2.52 = A$21.43 * 11.74%
Source: Weighted future Return on Equity estimates from 11 analysts.
Book Value of Equity per Share: A$21.43
Source: Weighted future Book Value estimates from 8 analysts.
Expected Growth Rate: 2.76%
Source: Risk Free Rate/ 10 year Government Bond Rate in AUD.
Value per share:
Current discount (share price of A$28.18): 15.19%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 8.55% = 2.76% + (0.8 * 7.24%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value (A$81,697,228,990).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
0.726 = 0.283 (1 + (1- 30%) (208.36%))
Levered Beta used in calculation = 0.8
This company is a bank or financial institution, which is analysed accordingly below.
Mr. Shayne Cary Elliott, BCom has been the Chief Executive Officer and Executive Director of Australia and New Zealand Banking Group Ltd since January 1, 2016. Mr. Elliott has over 30 years’ experience in banking in Australia and overseas, in all aspects of the industry. He joined ANZ as Chief Executive Officer Institutional in June 2009, and was appointed Chief Financial Officer in 2012. Prior to joining ANZ, he held senior executive roles at EFG Hermes, the largest investment bank in the Middle East, which included Chief Operating Officer. He started his career with Citibank New Zealand and worked with Citibank/Citigroup for 20 years, holding various senior positions across the UK, USA, Egypt, Australia and Hong Kong. As a Director of the Financial Markets Foundation for Children, he contributes to the promotion of health and welfare of Australian children. He actively engages in the promotion of Australian economic growth, social progress and public policy development through membership of the Australian Bankers’ Association and Business Council of Australia. He has been chair the Australian Bankers’ Association since December 2017. He has been a Director of ANZ Bank New Zealand Limited since 2009, ANZ Holdings (New Zealand) Limited since from 2012 and the Financial Markets Foundation for Children since from 2016. He has been a Member of Australian Bankers’ Association since from 2016 and Business Council of Australia since from 2016.
Average tenure and age of the Australia and New Zealand Banking Group management team in years:
Average tenure and age of the Australia and New Zealand Banking Group board of directors in years:
Below, I will examine the sector growth prospects, as well as evaluate whether Australia and New Zealand Banking Group is lagging or leading its competitors in the industry. … See our latest analysis for Australia and New Zealand Banking Group What’s the catalyst for Australia and New Zealand Banking Group's sector growth? … This growth may make Australia and New Zealand Banking Group a more expensive stock relative to its peers.Simply Wall St - – Full article
Over the past 10 years Australia and New Zealand Banking Group Limited (ASX:ANZ) has returned an average of 6.00% per year from dividend payouts. … See our latest analysis for Australia and New Zealand Banking Group How I analyze a dividend stock When researching a dividend stock, I always follow the following screening criteria: Is it paying an annual yield above 75% of dividend payers? … ASX:ANZ Historical Dividend Yield Feb 1st 18 How well does Australia and New Zealand Banking Group fit our criteria?Simply Wall St - – Full article
A borrower’s demand for, and ability to repay, loans is driven by economic growth which directly impacts the level of risk Australia and New Zealand Banking Group takes on. … Australia and New Zealand Banking Group’s ability to forecast and provision for its bad loans indicates it has a good understanding of the level of risk it is taking on. … This indicates a prudent level of the bank's safer form of borrowing and a prudent level of risk.Final words With positive measures for all three ratios, Australia and New Zealand Banking Group shows a prudent level of managing its risky assets.Simply Wall St - – Full article
Let’s take a look at Australia and New Zealand Banking Group’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change. … It’s trading around 17% below my intrinsic value, which means if you buy Australia and New Zealand Banking Group today, you’d be paying a reasonable price for it. … Furthermore, it seems like Australia and New Zealand Banking Group’s share price is quite stable, which means there may be less chances to buy low in the future now that it’s fairly valued.Simply Wall St - – Full article
By comparing a stock’s price per share to its earnings per share, we are able to see how much investors are paying for each dollar of the company’s earnings. … Formula Price-Earnings Ratio = Price per share ÷ Earnings per share P/E Calculation for ANZ Price per share = A$28.8 Earnings per share = A$2.201 ∴ Price-Earnings Ratio = A$28.8 ÷ A$2.201 = 13.1x The P/E ratio isn’t a metric you view in isolation and only becomes useful when you compare it against other similar companies. … Since ANZ's P/E of 13.1x is lower than its industry peers (13.2x), it means that investors are paying less than they should for each dollar of ANZ's earnings.Simply Wall St - – Full article
Today I will run you through a basic sense check to gain perspective on how Australia and New Zealand Banking Group is doing by comparing its latest earnings with its long-term trend as well as the performance of its banks industry peers. … Check out our latest analysis for Australia and New Zealand Banking Group Commentary On ANZ's Past Performance I prefer to use the ‘latest twelve-month’ data, which annualizes the most recent half-year data, or in some cases, the latest annual report is already the most recent financial year data. … For Australia and New Zealand Banking Group, its latest trailing-twelve-month earnings is A$6,406.0M, which, against the prior year's figure, has increased by 12.21%.Simply Wall St - – Full article
The most recent earnings announcement Australia and New Zealand Banking Group Limited's (ASX:ANZ) released in September 2017 suggested that the business experienced a robust tailwind, leading to a double-digit earnings growth of 12.21%. … Below, I've laid out key numbers on how market analysts perceive Australia and New Zealand Banking Group's earnings growth outlook over the next few years and whether the future looks even brighter than the past. … See our latest analysis for Australia and New Zealand Banking Group Market analysts' prospects for the upcoming year seems rather muted, with earnings expanding by a single digit 8.44%.Simply Wall St - – Full article
Since Australia and New Zealand Banking Group Limited (ASX:ANZ) released its earnings in September 2017, analysts seem cautiously optimistic, as a 8.56% increase in profits is expected in the upcoming year, compared with the past 5-year average growth rate of 3.38%. … Below is a brief commentary around Australia and New Zealand Banking Group's earnings outlook going forward, which may give you a sense of market sentiment for the company. … View our latest analysis for Australia and New Zealand Banking Group What can we expect from Australia and New Zealand Banking Group in the longer term?Simply Wall St - – Full article
Check out our latest analysis for Australia and New Zealand Banking Group ASX:ANZ Historical Debt Dec 8th 17 Is ANZ's Leverage Level Appropriate? … While financial companies will always have some leverage for a sufficient capital buffer, Australia and New Zealand Banking Group’s leverage ratio of 15x is very safe and substantially below the maximum limit of 20x. … Compared to the appropriate industry loan to deposit level of 90%, Australia and New Zealand Banking Group’s ratio of over 96.43% is higher which puts the bank in a risky position as it borders negative liquidity disparity between loan and deposit levels.Simply Wall St - – Full article
ASX:ANZ Intrinsic Value Nov 24th 17 The Calculation The central assumption for this model is, the value of the company is how much money it can generate from its current level of equity capital, in excess of the cost of that capital. … The returns in excess of cost of equity is called excess returns: Excess Return Per Share = (Stable Return On Equity – Cost Of Equity) (Book Value Of Equity Per Share) = (12.14% – 8.62%) * A$20.23 = A$0.76 We use this value to calculate the terminal value of the company, which is how much we expect the company to continue to earn every year, forever. … This is a common component of discounted cash flow models: Terminal Value Per Share = Excess Return Per Share / (Cost of Equity – Expected Growth Rate) = A$0.76 / (8.62% – 2.76%) = A$12.97 Putting this all together, we get the value of ANZ’s share: Value Per Share = Book Value of Equity Per Share + Terminal Value Per Share = A$20.23 + A$12.97 = A$34.61 Relative to the present share price of A$29.07, ANZ is trading in-line with its true value.Simply Wall St - – Full article
Australia and New Zealand Banking Group Limited, together with its subsidiaries, provides various banking and financial products and services to individual and business customers. The company’s Australia division offers retail products and services to consumer and private banking customers in Australia through the branch network, mortgage specialists, the contact center, and various self-service channels, such as Internet banking, phone banking, ATMs, Website, and digital banking; and corporate and commercial banking services comprising financial solutions through dedicated managers focusing on privately owned small, medium, and large enterprises, as well as the agricultural business segment. Its Institutional division provides working capital and liquidity solutions, including documentary trade, supply chain financing, cash management solutions, deposits, payments, and clearing; loan products, loan syndication, specialized loan structuring and execution, project and export finance, debt structuring and acquisition finance, structured trade and asset finance, and corporate advisory services; and risk management services on foreign exchange, interest rates, credit, commodities, debt capital markets, and wealth solutions. The company's New Zealand division offers retail and commercial banking and wealth management services to consumer, private banking, and small business customers. Its Wealth Australia division provides life, general, and mortgage insurance; and fund management services. The company's Asia Retail & Pacific division offers general banking and wealth management services; and products and services to retail customers, small to medium-sized enterprises, institutional customers, and governments. It operates in Australia, New Zealand, the Asia Pacific, Europe, and the Americas. The company was founded in 1835 and is headquartered in Melbourne, Australia.
|Name:||Australia and New Zealand Banking Group Limited|
Australia and New Zealand Banking Group Limited
ANZ Centre Melbourne,
|Exchange Symbol||Ticker Symbol||Security||Exchange||Country||Currency||Listed on|
|ASX||ANZ||Ordinary Shares||Australian Securities Exchange||AU||AUD||02. Jan 1980|
|OTCPK||ANEW.F||Ordinary Shares||Pink Sheets LLC||US||USD||02. Jan 1980|
|DB||ANB||Ordinary Shares||Deutsche Boerse AG||DE||EUR||02. Jan 1980|
|NZSE||ANZ||Ordinary Shares||New Zealand Stock Exchange||NZ||NZD||02. Jan 1980|
|OTCPK||ANZB.Y||SPONSORED ADR||Pink Sheets LLC||US||USD||06. Dec 1994|
|ASX||ANZPC||CNV PREF NPV CPS3 DEF SETTLEMENT||Australian Securities Exchange||AU||AUD||29. Sep 2011|
|DB||ANB1||SPONSORED ADR||Deutsche Boerse AG||DE||EUR||06. Dec 1994|
|ASX||ANZPE||FRN RVCV SUB 03/2024 AUD100||Australian Securities Exchange||AU||AUD||01. Apr 2014|
|Company Analysis updated:||2018/02/22|
|Last estimates confirmation:||2018/02/21|
|Last earnings update:||2017/09/30|
|Last annual earnings update:||2017/09/30|
All dates in UTC. All financial data provided by Standard & Poor’s Capital IQ.
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.