Australian stock report - ANZ Banking Group
Australia and New Zealand Banking increases 1.8%, announces buyback of shares June 15, 2018 16:00 AEST
NEWS BITES - AUSTRALIA
Australia and New Zealand Banking Group Limited (ASX:ANZ), Australia's 3rd largest Bank by market cap, has increased 48.0c (1.8%) from its last trading session of June 14 to close at $A26.68. Compared with the All Ordinaries Index which rose 75.7 points (1.2%) in the day, the relative price increase was 0.6%. The rise has been propped up by high volume of 2.2 times the average daily volume of 5 million shares.
BUYBACK OF SHARES
Australia and New Zealand Banking announced a buyback of 1,112,935 shares worth $A29,431,566 (or $US22,255,591) on June 13. The buyback price was $A26.45.
Highlights in today's Report:
SECTION 1 BULLISH SIGNALS
SECTION 2 BEARISH SIGNALS
SECTION 3 PRICE VOLUME DYNAMICS
SECTION 4 RELATED NEWS
SECTION 5 GLOBAL RANKING
SECTION 6 SUMMARY FINANCIALS
SECTION 7 PROFILE
SECTION 1 AUSTRALIA AND NEW ZEALAND BANKING BULLISH SIGNALS
+ The P/E of 12.1 multiplied by the P/NTA of 1.5 is 18.1. Being less than the Benjamin Graham benchmark of 22.5 the stock appears undervalued.
+ The relative yield of ANZ, defined by its yield of 6%, divided by average yield of dividend yielding stocks in the All Ordinaries Index of 4.4% is 135.4%. This suggests Australia and New Zealand Banking stock is undervalued in dividend yield terms.
+ Net profit margin has averaged 21.9% in the last 3 years. This is considered superior and suggests a high margin of safety.
+ Brandirectory have estimated Australia and New Zealand Banking's brand value at $A7.8 billion. The Brand Value represents 1.3% of the estimated Enterprise Value of $A606.5 billion.
1.2 Undervaluation [compared with sector average]:
+ Price to Book of 1.5 [1.8]. We estimate Australia and New Zealand Banking stock is trading at a current year Price to Book of 1.4 and a forward year Price to Book of 1.4.
Uptrend: The stock rose 1.8% on high volatility today and expanding price range.
+ The present value of AUD1,000 (PV1000) invested thirty years ago in Australia and New Zealand Banking is $A30,384, including a capital gain of $A9,964 and dividend reinvested of $A19,420.
+ 30 years Multiplier in AUD = 30.384x
+ Compound Annual Growth Rate (CAGR) in AUD = 11.9%
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 $US27,456, including a capital gain of $US9,184 and dividend reinvested of $US17,273.
+ 30 years ago AUD 1 equalled USD 0.8034
+ 30 years Multiplier in USD = 27.456x
+ Compound Annual Growth Rate (CAGR) in USD = 11.6%
Jun 15, 2018: AUD 1 equals USD 0.75
1.4 Oversold/Bullish/Support Signals:
+ The Relative Strength Index (RSI) of 26.8 has breached the oversold line of 30, suggesting the price decrease of 3.8% in the last 14 days is unusually high.
+ The Stochastic indicator of 9.0 has pierced the oversold line of 20; this indicates the price is close to its 14-day low and is likely to revert to an uptrend.
1.5 Short Selling:
+ The current short volume is 0.7 times its own historical average of 0.03%. It plummeted 28.7% from the previous day, plummeted 19.7% from a week ago and plummeted 35.9% from a month ago, a significant bullish indicator.
1.6 High Performance Indicators:
|Description||ANZ Value||Rank In Market|
|Today's Turnover||$A298.7 million||In Top 1%|
|Volatility %||1.6||In Top Quartile|
|Price Change %||1.8||In Top Quartile|
SECTION 2 AUSTRALIA AND NEW ZEALAND BANKING BEARISH SIGNALS
+ Total Liabilities/EBITDA of 87.1 which compares unfavourably with the Joseph Piotroski benchmark of 5.
+ As per the Du Pont analysis, Return on Equity of 10.9% is lower than sector average of 12.3%. This is computed as net profit margin of 22.1% times asset turnover [sales/assets] of 0.03 times leverage factor [total assets/shareholders' equity] of 15.2.
2.2 Overvaluation [compared with sector average]:
+ Return on Equity 10.9% [12.3%].
+ Return on Assets 0.7% [0.8%].
+ Dividend yield of 6% [8.6%].
+ The price dropped 3.8% in the last month.
+ In the last three months the stock has hit a new 52-week low thrice.
2.4 Low Performance Indicators:
|Description||ANZ Value||Rank In Market|
|Total Debt to Equity||10.1||In Bottom 1%|
|Return on Assets [ROA] %||0.7||In Bottom 5%|
SECTION 3 AUSTRALIA AND NEW ZEALAND BANKING PRICE VOLUME DYNAMICS
+ Australia and New Zealand Banking is at a discount of 8.4% to its 12-month high of $A29.14 on October 25, 2017. It is also at a premium of 5.2% to the 12-month low of $A25.37 on April 27.
+ The present value of $A1,000 (PV1000) invested one year ago in Australia and New Zealand Banking is $A1,066, comprising a capital gain of $A7 and dividend reinvested of $A58.
|All Ordinaries Index||1,008||1,010||1,070|
3.2 Moving Annual Return
Based on a dynamic start date of 5 years ago, the Moving Annual Return has been positive in 4 of the last 5 years. An investment a year ago in ANZ would have produced a return of 6.8%.
|ANZ||Close (AUD)||Dividends (AUD)||Capital Gain / (Loss) %||% Yield||Annual Return %|
|1 Yr ago||26.49||1.6||25.1||7.6||32.7|
|2 Yrs ago||21.17||2.61||(20.1)||9.9||(10.2)|
|3 Yrs ago||26.49||0.95||(3.5)||3.5||-|
|4 Yrs ago||27.45||2.47||27.4||11.5||38.9|
Close 5 years ago $A21.53
3.3 Beta & Alpha:
+ Beta: the Beta of Australia and New Zealand Banking stock is 0.9. A Beta lower than 1 suggests this is a low risk, low return stock with volatility less than that of the market.
+ Alpha: the Alpha of the stock is -6.1. The actual return of 1.2% fell short of the expected return of 7.3%, reflecting underperformance.
3.4 Aggregate Volumes, Prices and Turnover Period:
[Volume Index or VI in brackets; 1 is average]
+ ASX: ANZ.ASX 11,194,882 [VI of 2.2] volume 99.89% of aggregate. Price: $A26.68.
+ New Zealand: ANZ.NZSX 8,943 [VI of 0.5] volume 0.08% of aggregate. Price: $NZ28.60. Using the current exchange rate of NZD1 equals 0.9316AUD, The shares are at a 0.1% discount to the close price on ASX.
+ Aggregate volume: there were 11.2 million shares of Australia and New Zealand Banking worth $A299 million traded today. The aggregate volume was 2.2 times average trading of 5.1 million shares.
The turnover rate in the 12 months to date was 46.7% (or a turnover period of 2 years 51 days). This average length of ownership of the stock at 1.1 times the average holding period of 1 year 10 months for stocks in the All Ordinaries Index suggests a larger number of speculators on the share register, making it less safe for long-term investors.
3.5 The Past Two Years
+ Australia and New Zealand Banking Group Limited (ASX:ANZ), has added $A5.51 (or 26.0%) in the past two years to close at $A26.68 today. Compared with the All Ordinaries Index which has risen 17.5% over the same period, this is a relative price increase of 8.5%.
SECTION 4 AUSTRALIA AND NEW ZEALAND BANKING RELATED NEWS
4.1 Corporate Wires
Australia and New Zealand Banking (ANZ) issued 4 new Releases this week.
June 14: Australia and New Zealand Banking buys back 1,112,935 shares
Australia and New Zealand Banking (ANZ.AU) announced a buyback of 1,112,935 shares worth $A29,431,566 (or $US22,255,591) on June 13, 2018. The buyback price was $A26.45.
To view the previous 3 months' Releases in full, click here
4.2 Other News
+ BSS/News Bites:
Australia and New Zealand Banking Group Limited is placed 818/1430 in BSS News Bites' ranking of Australian performers in the past year, a percentile ranking of 43.
+ Vanguard Total World Stock ETF 7581:
The stock was one of 7581 global stocks selected by Vanguard Total World Stock ETF (VT) who bought 93,389 shares in the period Jan 31, 2018 to Apr 30, 2018 worth $US2,500,883 at an estimated Volume Weighted Average Price (VWAP) of $US26.7792. As at Apr 30, 2018, the Vanguard Total World Stock ETF held 934,852 shares worth $US18,935,988 or 0.11% by value of the ETF's portfolio [Ranked 135 out of 7581 by value and 4 out of 248 for Australia].
SECTION 5 AUSTRALIA AND NEW ZEALAND BANKING GLOBAL RANKING
Global Rank [out of 47,575 stocks] and Rank in the Asia Pacific Region [out of 2,084 stocks]
|Description||Value||Global Rank||In APAC Region|
|Total Assets (US$)||669.6B||129||2|
|Net Profit (US$)||4.8B||215||5|
|Return on Equity %||10.9||12,338||392|
|Net Profit Margin %||22.1||5,293||231|
|Price to Book||1.5||16,852||600|
|PV$1000 (1Year) US$*||1,026||20,819||1,071|
|US$* Change (1Year) %||-2.9||21,440||1,079|
* 1 year ago AUD 1 = USD 0.76
Jun 15, 2018: AUD 1 equals USD 0.75
SECTION 6 AUSTRALIA AND NEW ZEALAND BANKING SUMMARY FINANCIALS
6.1 Dividend History
+ Trailing 12 months dividend has deteriorated from $A2.47 in 2014 to $A1.60 in 2018.
6.2 Financials Summary
|Year ended||Sep 2017||Sep 2016||Sep 2015|
|Sales (USD B)||22.2||22.8||26.3|
|Pretax (USD B)||7.3||6.2||8|
|Net (USD B)||4.9||4.3||5.7|
+ Net profit was up 12.2% from US$4.3 billion in 2016 to US$4.9 billion in 2017.
+ Earnings Per Share (EPS) was up 11.7% from $A1.97 to $A2.20.
SECTION 7 AUSTRALIA AND NEW ZEALAND BANKING PROFILE
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 Top Management
The chairman is David Gonski and the chief executive officer is Shayne Elliott.
7.3 Issued Capital
Based on 2,913,774,780 issued shares the market capitalisation is $A77.7 billion.
Contact: (03) 9273 6141
Physical Address: ANZ Centre Melbourne, Level 9, 833 Collins Street, Docklands, VIC, Australia, 3008
Exchange: Australian Securities Exchange
Economic Sector: Financials
Business Sector: Banking & Investment Services
Industry Group: Banking Services
AU:ANZ; ASX:ANZ; AX:ANZ; ANZ.AX
Australia & New Zealand Banking Group Ltd, Australia And New Zealand Banking Group Limited, Australia And New Zealand Banking Group Ltd