ASX:ANZ

Stock Analysis Report

Australia and New Zealand Banking Group

Executive Summary

Australia and New Zealand Banking Group Limited provides various banking and financial products and services in Australia, New Zealand, the Asia Pacific, Europe, and the Americas.

Rewards

Trading at 12.9% below its fair value

Earnings are forecast to grow 1.26% per year

Risk Analysis

High level of non-cash earnings

Unstable dividend track record



Snowflake Analysis

Flawless balance sheet established dividend payer.


Similar Companies

Share Price & News

How has Australia and New Zealand Banking Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ANZ has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.2%

ANZ

1.0%

AU Banks

0.1%

AU Market


1 Year Return

-0.5%

ANZ

5.3%

AU Banks

19.5%

AU Market

Return vs Industry: ANZ underperformed the Australian Banks industry which returned 3.3% over the past year.

Return vs Market: ANZ underperformed the Australian Market which returned 19.4% over the past year.


Shareholder returns

ANZIndustryMarket
7 Day-0.2%1.0%0.1%
30 Day2.7%4.2%4.0%
90 Day-7.9%-5.0%4.8%
1 Year5.7%-0.5%11.9%5.3%24.9%19.5%
3 Year3.3%-13.1%7.2%-10.6%39.7%20.9%
5 Year0.4%-25.4%10.8%-19.6%59.0%23.1%

Price Volatility Vs. Market

How volatile is Australia and New Zealand Banking Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Australia and New Zealand Banking Group undervalued compared to its fair value and its price relative to the market?

11.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ANZ (A$25.25) is trading below our estimate of fair value (A$29)

Significantly Below Fair Value: ANZ is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: ANZ is good value based on its PE Ratio (11.7x) compared to the Banks industry average (11.7x).

PE vs Market: ANZ is good value based on its PE Ratio (11.4x) compared to the Australian market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: ANZ is poor value based on its PEG Ratio (9x)


Price to Book Ratio

PB vs Industry: ANZ is overvalued based on its PB Ratio (1.2x) compared to the AU Banks industry average (1.1x).


Next Steps

Future Growth

How is Australia and New Zealand Banking Group forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

1.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ANZ's forecast earnings growth (1.3% per year) is above the savings rate (1.1%).

Earnings vs Market: ANZ's earnings (1.3% per year) are forecast to grow slower than the Australian market (9.6% per year).

High Growth Earnings: ANZ's earnings are forecast to grow, but not significantly.

Revenue vs Market: ANZ's revenue (1.8% per year) is forecast to grow slower than the Australian market (3.8% per year).

High Growth Revenue: ANZ's revenue (1.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ANZ's Return on Equity is forecast to be low in 3 years time (10%).


Next Steps

Past Performance

How has Australia and New Zealand Banking Group performed over the past 5 years?

-2.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ANZ has a high level of non-cash earnings.

Growing Profit Margin: ANZ's current net profit margins (35%) are lower than last year (36.8%).


Past Earnings Growth Analysis

Earnings Trend: ANZ's earnings have declined by -2.1% per year over the past 5 years.

Accelerating Growth: ANZ's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ANZ had negative earnings growth (-11.3%) over the past year, making it difficult to compare to the Banks industry average (-10.6%).


Return on Equity

High ROE: ANZ's Return on Equity (10.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Australia and New Zealand Banking Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: ANZ has a low level of unsold assets or inventory.

Debt Coverage by Assets: ANZ's debt is covered by short term assets (assets are 1x debt).


Financial Institutions Analysis

Asset Level: ANZ's level of assets compared to its equity is moderate.

Allowance for Bad Loans: ANZ has a sufficient allowance for bad loans.

Low Risk Liabilities: ANZ's liabilities are made up of primarily low risk sources of funding.

Loan Level: ANZ has an acceptable proportion of non-loan assets held.

Low Risk Deposits: ANZ's loans are broadly funded by customer deposits.

Level of Bad Loans: ANZ has an appropriate level of bad loans (0.33%)


Next Steps

Dividend

What is Australia and New Zealand Banking Group's current dividend yield, its reliability and sustainability?

6.28%

Current Dividend Yield


Dividend Yield vs Market

company6.3%marketbottom25%2.3%markettop25%5.5%industryaverage5.9%forecastin3Years6.2%

Current dividend yield vs market & industry

Notable Dividend: ANZ's dividend (6.34%) is higher than the bottom 25% of dividend payers in the Australian market (2.34%).

High Dividend: ANZ's dividend (6.34%) is in the top 25% of dividend payers in the Australian market (5.47%)


Stability and Growth of Payments

Stable Dividend: ANZ's dividend payments have been volatile in the past 10 years.

Growing Dividend: ANZ's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (72%), ANZ's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ANZ's dividends in 3 years are forecast to be covered by earnings (73.7% payout ratio).


Next Steps

Management

What is the CEO of Australia and New Zealand Banking Group's salary, the management and board of directors tenure and is there insider trading?

1.8yrs

Average management tenure


CEO

Shayne Elliott (55yo)

4yrs

Tenure

AU$5,181,339

Compensation

Mr. Shayne Cary Elliott, B.Com has been Chief Executive Officer and Executive Director of Australia and New Zealand Banking Group Limited since January 1, 2016 and served as its Member of Management Board. ...


CEO Compensation Analysis

Compensation vs Market: Shayne's total compensation ($USD3.58M) is about average for companies of similar size in the Australian market ($USD3.87M).

Compensation vs Earnings: Shayne's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.8yrs

Average Tenure

51.5yo

Average Age

Experienced Management: ANZ's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

5.3yrs

Average Tenure

59yo

Average Age

Experienced Board: ANZ's board of directors are considered experienced (5.3 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Shayne Elliott (55yo)

    CEO & Executive Director

    • Tenure: 4yrs
    • Compensation: AU$5.18m
  • Alexis George (55yo)

    Deputy CEO & Group Executive of Wealth Australia

    • Tenure: 1.7yrs
    • Compensation: AU$2.23m
  • Mark Whelan (59yo)

    Group Executive of Institutional

    • Compensation: AU$3.66m
  • Craig Sims

    Group General Manager of Operations & Services

    • Tenure: 4yrs
  • David Fisher

    Head of Technology

    • Antonia Watson (50yo)

      Chief Executive Officer of New Zealand

      • Tenure: 0.6yrs
      • Compensation: AU$1.05m
    • Maile Carnegie (49yo)

      Group Executive of Digital & Australia Transformation

      • Tenure: 0.8yrs
      • Compensation: AU$2.36m
    • Michelle Jablko (46yo)

      Chief Financial Officer

      • Tenure: 3.5yrs
      • Compensation: AU$2.65m
    • Mark Hand (53yo)

      Group Executive Australia Retail & Commercial Banking

      • Tenure: 0.8yrs
      • Compensation: AU$1.65m
    • Kevin Corbally (49yo)

      Group Chief Risk Officer

      • Tenure: 1.8yrs
      • Compensation: AU$2.22m

    Board Members

    • Paul O’Sullivan (58yo)

      Independent Non-Executive Director

      • Tenure: 0.2yrs
    • David Gonski (65yo)

      Independent Chairman of the Board

      • Tenure: 5.7yrs
      • Compensation: AU$660.00k
    • Ilana Atlas (64yo)

      Independent Non Executive Director

      • Tenure: 5.3yrs
      • Compensation: AU$296.50k
    • Graeme Liebelt (65yo)

      Independent Non-Executive Director

      • Tenure: 6.5yrs
      • Compensation: AU$315.50k
    • JT Macfarlane (59yo)

      Independent Non-Executive Director

      • Tenure: 5.7yrs
      • Compensation: AU$270.50k
    • Paula Dwyer (58yo)

      Independent Non Executive Director

      • Tenure: 7.8yrs
      • Compensation: AU$317.00k
    • Shayne Elliott (55yo)

      CEO & Executive Director

      • Tenure: 4yrs
      • Compensation: AU$5.18m
    • Tony Carter (61yo)

      Independent Director of ANZ Bank New Zealand

      • Jane Halton (59yo)

        Independent Non-Executive Director

        • Tenure: 3.3yrs
        • Compensation: AU$266.71k
      • John Key (58yo)

        Independent Non-Executive Director

        • Tenure: 1.9yrs
        • Compensation: AU$249.78k

      Company Information

      Australia and New Zealand Banking Group Limited's company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: Australia and New Zealand Banking Group Limited
      • Ticker: ANZ
      • Exchange: ASX
      • Founded: 1835
      • Industry: Diversified Banks
      • Sector: Banks
      • Market Cap: AU$73.457b
      • Shares outstanding: 2.84b
      • Website: https://www.anz.com

      Number of Employees


      Location

      • Australia and New Zealand Banking Group Limited
      • ANZ Centre Melbourne
      • Level 9
      • Docklands
      • Victoria
      • 3008
      • Australia

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      ANEW.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDJan 1980
      ANZASX (Australian Securities Exchange)YesOrdinary SharesAUAUDJan 1980
      ANZNZSE (New Zealand Stock Exchange)YesOrdinary SharesNZNZDJan 1980
      ANBDB (Deutsche Boerse AG)YesOrdinary SharesDEEURJan 1980
      ANZCHIA (Chi-X Australia)YesOrdinary SharesAUAUDJan 1980
      ANZB.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDDec 1994
      ANB1DB (Deutsche Boerse AG)SPONSORED ADRDEEURDec 1994
      ANZPCASX (Australian Securities Exchange)CNV PREF NPV CPS3 DEF SETTLEMENTAUAUDSep 2011
      ANZPEASX (Australian Securities Exchange)FRN CNV PERP AUD100AUAUDApr 2014

      Biography

      Australia and New Zealand Banking Group Limited provides various banking and financial products and services in Australia, New Zealand, the Asia Pacific, Europe, and the Americas. The company’s Australia Retail and Commercial division offers various products and services to consumer customers through the branch network, mortgage specialists, contact centers, self-service channels, and third party brokers, as well as offers financial planning services. It also provides banking products and financial services, including asset financing for medium to large commercial customers, agribusiness customers, small business owners, high net worth individuals, and family groups. The company’s Institutional division offers documentary trade, supply chain financing, commodity financing, cash management solutions, deposits, payments, and clearing; loan syndication, specialized loan structuring and execution, project and export finance, debt structuring and acquisition finance, and corporate advisory services, as well as loan products; and risk management services on foreign exchange, interest rates, credit, commodities, and debt capital markets. It serves governments, global institutional, and corporate customers. The company’s New Zealand division offers banking and wealth management services to consumer, and private banking and small business banking customers through its Internet and app-based digital solutions, network of branches, mortgage specialists, relationship managers, and contact centers; and traditional relationship banking and financial solutions for medium to large enterprises, and agricultural businesses. Its Pacific division offers various products and services that include retail products, and traditional relationship banking and sophisticated financial solutions. This division serves retail customers, small to medium-sized enterprises, institutional customers, and governments. The company was founded in 1835 and is based in Docklands, Australia. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/28 10:36
      End of Day Share Price2020/01/28 00:00
      Earnings2019/09/30
      Annual Earnings2019/09/30


      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.