ANZ (ANZBY) versus Westpac Banking (WBK) Critical Survey

ANZ (OTCMKTS:ANZBY) and Westpac Banking (NYSE:WBK) are both large-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, earnings, profitability, risk and valuation.

Profitability

This table compares ANZ and Westpac Banking’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ANZ N/A N/A N/A
Westpac Banking N/A N/A N/A

Dividends

ANZ pays an annual dividend of $1.15 per share and has a dividend yield of 5.6%. Westpac Banking pays an annual dividend of $1.38 per share and has a dividend yield of 6.8%. ANZ pays out 66.1% of its earnings in the form of a dividend. Westpac Banking pays out 78.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of recent ratings for ANZ and Westpac Banking, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ANZ 0 0 0 0 N/A
Westpac Banking 2 3 1 0 1.83

Risk & Volatility

ANZ has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500. Comparatively, Westpac Banking has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500.

Insider & Institutional Ownership

0.1% of ANZ shares are owned by institutional investors. Comparatively, 0.6% of Westpac Banking shares are owned by institutional investors. 0.3% of ANZ shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares ANZ and Westpac Banking’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ANZ $26.30 billion 2.30 $4.88 billion $1.74 11.89
Westpac Banking $28.58 billion 2.39 $6.09 billion $1.75 11.67

Westpac Banking has higher revenue and earnings than ANZ. Westpac Banking is trading at a lower price-to-earnings ratio than ANZ, indicating that it is currently the more affordable of the two stocks.

Summary

Westpac Banking beats ANZ on 7 of the 11 factors compared between the two stocks.

About ANZ

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.

About Westpac Banking

Westpac Banking Corporation provides various banking and financial services in Australia, New Zealand, Asia, the Pacific region, and internationally. It operates through five divisions: Consumer Bank, Business Bank, BT Financial Group, Westpac Institutional Bank, and Westpac New Zealand. It offers everyday banking, savings, term deposit, moving to Australia, under 21 and student, business, community solutions one, not-for-profit savings, and foreign currency accounts; term, tailor-made, and farm management deposits; debit, credit, and travel money cards; home, personal, investment, small business, and commercial loans; and equipment, automotive, cash flow, property, and insurance premium financing services. It also provides home and content, landlord, car, travel, boat, caravan and trailer, life, credit card and loan repayment, income protection, business, farm pack, person income, and business overheads insurance products; superannuation and retirement products; investment portfolios; installment warrants; and trading, financial advisory, wealth, foreign currency exchange, international payment, cash flow management, international trade, and import and export services. In addition, it offers industry specific banking and treasury services; other services, such as emergency cash, online and telephone banking, ATMs, unclaimed money, travel center, margin lending, and banking services to migrants moving to Australia; and mobile wallets. Further, it provides capital advisory and fund management, transactional and private banking, and financial market services; and corporate and structured finance, as well as trade and supply chain finance. It serves individuals; micro, small, and medium enterprises; and commercial, corporate, institutional, and government customers. The company was formerly known as Bank of New South Wales and changed its name to Westpac Banking Corporation in October 1982. The company was founded in 1817 and is headquartered in Sydney, Australia.

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