Australian stock report - ANZ Banking Group

AUSTR

UPDATE: Australia and New Zealand Banking in 2nd consecutive rise, nears four-month high July 26, 2017 16:00 AEST

NEWS BITES - AUSTRALIA

Australia and New Zealand Banking Group Limited (ASX:ANZ), Australia's 3rd largest Bank by market cap, extended its gains on Wednesday, rising an additional 27.0c (0.9%) to trade at $A30.28. The stock increased 0.4% on Tuesday. This brought its 2-day rise to 1.3%, compared with the All Ordinaries Index which rose 85.3 points (1.5%) in the two days for a relative price change of -0.2%. Cumulative volume in the 2 days was 0.5 times the average 2-day volume of 6.2 million shares. The stock is now approaching its 82-day high of $A30.37.

SECTION 1

AUSTRALIA AND NEW ZEALAND BANKING BULLISH SIGNALS

1.1 Fundamentals:

+ The relative yield of the stock, defined by its yield of 5.3%, divided by average yield of dividend yielding stocks in the All Ordinaries Index of 4.2% is 125.4%. This suggests the stock is undervalued in dividend yield terms.

+ Net profit margin has averaged 22.8% in the last 3 years. This is considered superior and suggests a high margin of safety.

+ As per the Du Pont analysis, Return on Equity of 9.9% is better than sector average of 9.5%. This is computed as net profit margin of 19.1% times asset turnover [sales/assets] of 0.04 times leverage factor [total assets/shareholders' equity] of 15.8.

1.2 Undervaluation [compared with sector average]:

+ Price/Earnings of 16 [19.1]. We estimate Australia and New Zealand Banking stock is trading at a current year P/E of 16.4 and a forward year P/E of 17.3.

+ Price to Book of 1.8 [2.2]. We estimate Australia and New Zealand Banking stock is trading at a current year Price to Book of 1.6 and a forward year Price to Book of 1.5.

1.3 Technicals:

+ The Moving Average Convergence Divergence (MACD) indicator of 12-day Exponential Moving Average (EMA) of 29.52 minus the 26-day EMA of 29.1 is positive 0.41 suggesting a bullish signal. Both EMA prices are rising, another bullish signal.

+ The 5.6% discount to 12-month high of $A32.09 against the 27.4% premium to 12-month low of $A23.77 suggests the stock continues to push for new highs.

+ The present value of $A1,000 (PV1000) invested one year ago in Australia and New Zealand Banking is $A1,318, comprising a capital gain of $A247 and dividend reinvested of $A71.

PV$10001-week1-month1-year
ANZ.ASX1,0301,0911,318
All Ordinaries Index1,0091,0041,038

+ The present value of AUD1,000 (PV1000) invested thirty years ago in Australia and New Zealand Banking is $A32,417, including a capital gain of $A12,024 and dividend reinvested of $A19,393.

+ 30 years Multiplier in AUD = 32.417x

+ Compound Annual Growth Rate (CAGR) in AUD = 12.2%

Present Value of USD1,000 invested 30 years ago:

+ The present value of USD1,000 (PV1000) invested thirty years ago in Australia and New Zealand Banking is $US36,419, including a capital gain of $US13,632 and dividend reinvested of $US21,787.

+ 30 years ago AUD 1 equalled USD 0.707

+ 30 years Multiplier in USD = 36.419x

+ Compound Annual Growth Rate (CAGR) in USD = 12.6%

Jul 26, 2017: AUD 1 equals USD 0.79

1.4 Short Selling:

+ The current short volume is 0.8 times its own historical average of 0.1%. It plummeted 35.4% from the previous day, a bullish indicator.

1.5 High Performance Indicators:

DescriptionValueRank In Market
Today's Turnover$A110.4 millionIn Top 1%
Volatility %0.5In Top 5%
Price/MAP501.06In Top 9%
Price/MAP2001.05In Top Quartile

SECTION 2

AUSTRALIA AND NEW ZEALAND BANKING BEARISH SIGNALS

2.1 Fundamentals:

+ Revenue growth rate has shown signs of deterioration in recent years. [Year ended, all figures in %]

YearRevenue GrowthEPS Growth
Sep 16-4.3-26.5
Sep 151-

2.2 Technicals:

Overbought/Bearish/Resistance Signals:

+ The stock is overbought according to the Williams % R indicator of -4.2, suggesting the price is close to its 14-day high of $A30.37.

2.3 Low Performance Indicator:

DescriptionValueRank In Market
Return on Assets [ROA] %0.6In Bottom 4%

SECTION 3

PRICE VOLUME DYNAMICS

3.1 Moving Annual Return

ANZClose (AUD)Dividends (AUD)Capital Gain / (Loss) %% YieldAnnual Return %
July 2630.281.624.76.631.3
1 Yr ago24.281.75(14.2)6.2(8.1)
2 Yrs ago28.321.81(2.2)6.34.1
3 Yrs ago28.941.7421.77.329.1
4 Yrs ago23.781.52338.541.5

3.2 Beta:

+ Beta: the Beta of Australia and New Zealand Banking stock is 1.3. A Beta greater than 1 suggests this is a high risk, high return stock with volatility greater than that of the market.

3.3 Aggregate Volumes, Prices and Turnover Period:

[Volume Index or VI in brackets; 1 is average]

+ ASX: ANZ.ASX 3,647,379 [VI of 0.6] volume 99.87% of aggregate. Price: $A30.28.

+ New Zealand: ANZ.NZSX 4,727 [VI of 0.1] volume 0.13% of aggregate. Price: $NZ32.22. Using the current exchange rate of NZD1 equals 0.9343AUD, The shares are at a 0.6% discount to the close price on ASX.

+ Aggregate volume: there were 3.7 million shares of Australia and New Zealand Banking worth $A110.6 million traded today. The aggregate volume was 0.6 times average trading of 6.2 million shares.

The turnover rate in the 12 months to date was 50.7% (or a turnover period of 1 year 11 months). This average length of ownership of the stock at 1.2 times the average holding period of 1 year 7 months for stocks in the All Ordinaries Index suggests a larger number of core investors, making a long-term investment safer.

SECTION 4

RANKING

4.1 Global Rank [out of 47,593 stocks] and Rank in the Asia Pacific Region [out of 2,049 stocks]

DescriptionValueGlobal RankIn APAC Region
MCap (US$)70.6B1565
Total Assets (US$)726.7B962
Revenue (US$)26.3B5106
Net Profit (US$)4.5B1965
Return on Equity %9.912,833405
Net Profit Margin %19.15,942244
Price to Book1.817,608831
Price/Earnings15.98,626344
Yield %5.33,719213
PV$1000 (1Year) US$*1,40310,270402
US$* Change (1Year) %25.113,415447

* 1 year ago AUD 1 = USD 0.75

Jul 26, 2017: AUD 1 equals USD 0.79

4.2 Independent Ratings

Australia and New Zealand Banking Group Limited was ranked 38 in the Brand Finance list of the world's 500 Valuable Banking brands by brand value in 2015; an improvement over a year from rank 39 in 2014. Brand Finance valued the brand at US$6,664 million and ranked it Number 38 in APAC.

It was ranked 48 in SNL's list of Top 100 Banks by Total Assets in 2016; a deterioration over a year from rank 47 in 2015.

It was ranked 56 by Newsweek and Corporate Knights Capital in the World's 500 Greenest Companies 2016. It had outstanding scores of 11.7% in Water productivity, 9.9% in Energy productivity and 9.4% in Waste productivity.

It is the 78th largest by profit in the FT Global 500.

It is a new entrant in PwC's list of Top 100 Global companies; ranked 96th by MCap as at March 31, 2015.

It is the 295th largest by revenue in the Forbes Global 2000.

It is placed 311/1255 in BSS News Bites' ranking of Australian performers in the past year, a percentile ranking of 75.

SECTION 5

AUSTRALIA AND NEW ZEALAND BANKING FINANCIALS

5.1 Financials Summary

Year endedSep 2016Sep 2015Sep 2014
Sales (USD B)26.327.527.3
Pretax (USD B)6.58.48.2
Net (USD B)4.565.8
EPS (AUD)1.892.572.57

5.2 Annual Report for the year ended September 30, 2016 (year-on-year comparisons with previous corresponding period)-

Australia and New Zealand Banking Net Profit down 23.8%

Australia and New Zealand Banking (ASX:ANZ) reported net profit for the year-ended 30 September 2016 of $A5.7b, down 23.8% from $A7.5b in the previous year.

Favourable Changes:

+ Tier 1 Ratio up from 11.3% to 11.8%.

+ Tier 2 Ratio up from 2% to 2.5%.

+ Deposits up 3.7% to $A577.5b ($US443.9b).

+ Non-Performing loans to Net loans deteriorated from 2.78% to 2.94%.

Unfavourable Changes:

+ Net profit slumps 23.8% from $A7.5b ($US5.2b) to $A5.7b ($US4.4b)

+ Total income down 4.3% from $A34.6b ($US24.2b) to $A33.1b ($US25.4b).

+ EPS slumps 26.5% from $A2.57 ($US1.8) to $A1.89 ($US1.45).

+ EBIT to total assets down 24.5 from 1.2% to 0.9%.

+ Return on Equity down from 13.1% to 9.9%.

+ Net tangible assets per share down 2.3% from $A17.74 ($US12.4) to $A17.34 ($US13.3).

Note:

+ Retained earnings to total assets steady at 3.1%.

+ Net Loans steady at $A567.1b ($US435.9b).

5.3 Trailing 12 Months Dividends

Trailing 12 Months ToValue ($A)
26 Jul 20171.6
26 Jul 20161.75
26 Jul 20151.81
26 Jul 20141.74
26 Jul 20131.52

SECTION 6

AUSTRALIA AND NEW ZEALAND BANKING CORPORATE BONDS

Key Statistics

MaturityYield to maturity %Yrs to Maturity% Rise/Fall 3-mo
Oct 20171.320.2-
Jan to Nov 20181.39 to 1.550.48 to 1.31-
Jun to Sep 20191.64 to 1.921.88 to 2.160.03
Jan to Nov 20201.76 to 2.122.47 to 3.31-
Jan to Dec 20212.29 to 2.483.47 to 4.35-
Mar to Aug 20221.98 to 2.514.62 to 5.07-
Nov 20252.98.31-

SECTION 7

AUSTRALIA AND NEW ZEALAND BANKING PROFILE

7.1 Activities

Australia and New Zealand Banking Group Limited is an international bank with activities in general banking, mortgage and installment lending, life insurance, leasing, hire purchase and general finance. ANZ also provides international and investment banking, investment and portfolio management and advisory services, nominee and custodian services, stock broking and executor and trustee services.

7.2 Industry & Sector

Classification LevelName of Sector
Economic SectorFinancials
Business SectorBanking & Investment Services
Industry GroupBanking Services
IndustryBanks

7.3 Top Management

The chairman is David Gonski, the chief executive officer is Shayne Elliott and the chief financial officer is Michelle Jablko.

7.4 Issued Capital

Based on 2,937,415,327 issued shares the market capitalisation is $A88.9 billion.

SECTION 8

REPORTED BUYING AND SELLING

Insider Buying and Selling

Reported Buying:

May 16: Australia and New Zealand Banking substantial shareholder buys

Australia and New Zealand Banking (ASX:ANZ) substantial shareholder Blackrock Group bought 148,984,864 shares worth $A4,353,337,726 ($US3,227,999,924) on May 12. The purchase price was $A29.22.

March 30: Australia and New Zealand Banking substantial shareholder buys

Australia and New Zealand Banking (ASX:ANZ) substantial shareholder BlackRock Group bought 147,932,142 shares worth $A4,778,208,187 ($US3,659,151,829) on March 29. The purchase price was $A32.30.

Reported Selling:

May 05: Australia and New Zealand Banking substantial shareholder sells

Australia and New Zealand Banking (ASX:ANZ) substantial shareholder BlackRock Investment Management (Australia) Limited sold 13,728 shares worth $A430,373 ($US318,390) on May 03. The selling price was $A31.35.

February 22: Australia and New Zealand Banking substantial shareholder sells

Australia and New Zealand Banking (ASX:ANZ) substantial shareholder BlackRock Investment Management (Australia) Limited sold 4,150 shares worth $A127,696 ($US98,057) on February 17. The selling price was $A30.77.

February 22: Australia and New Zealand Banking substantial shareholder sells

Australia and New Zealand Banking (ASX:ANZ) substantial shareholder BlackRock Institutional Trust Company, National Association sold 527 shares worth $A16,216 ($US12,452) on February 17. The selling price was $A30.77.

SECTION 9

STOCK BUZZ

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July 21: Australia and New Zealand Banking: Notice Corporations Act Subsection 259C(2)

July 19: ANZ comments on APRA Information Paper

July 04: Australia and New Zealand Banking increases issued capital by 0.05%

Australia and New Zealand Banking (ANZ.AU) has announced an increase of 1,378,318 shares (or 0.05%) in total shares on issue from 2,936,037,009 to 2,937,415,327. The effective date is Monday, July 03.

June 23: ANZ Key Dates Second Half Financial Year 2017

For shareholder reference the key dates for the second half of financial year 2017 are detailed below.

May 16: ANZ - Wholesale Debt ANZHAS - Interest Payment Details

Australia and New Zealand Banking Group Limited (ABN 11 005 357 522) ("Issuer") AUD200,000,000 4.75% Fixed Rate Subordinated Notes due May 2027 ( S eries 1809, Tranche 1 ) (ANZHAS) ("Notes") The Issuer advises the following details for the next interest payment on the Notes: Interest P ayment Date: 13 May 2018 for payment on 1 4 May 201 8 Record Date: 11 May 201 8 Interest Period: From and including 13 May 2017 t o but excluding 13 May 201 8 Yours faithfully Simon Pordage Company Secretary Australia and New Zealand Banking Group Limited

Contact: (03) 9273 6141

Physical Address: ANZ Centre Melbourne, Level 9, 833 Collins Street, Docklands, VIC, Australia, 3008

State/Province/Country: Australia

Exchange: Australian Securities Exchange

ISIN: AU000000ANZ3

AU:ANZ; ASX:ANZ; AX:ANZ; ANZ.AX

PermID: 4295856605

Australia & New Zealand Banking Group Ltd, Australia And New Zealand Banking Group Limited, Australia And New Zealand Banking Group Ltd

Source: www.BuySellSignals.com