MENU

Bendigo increases dividend

Bendigo and Adelaide Bank (ASX: BEN) saw its annual cash profit grow to $348 million, up 7.7% on the prior year.  The group announced a fully franked final dividend of 31 cents per share, a 3.3% increase on the prior half.  Earnings per share were 85.4 cents up 1.4% on the prior year.

Competition from the big four banks has long loomed over Bendigo’s retail growth strategy and total retail deposits were marginally up on the prior year. This fiercely competitive market makes up approximately 80% of the bank’s total funding and reliance continues to be placed on brand loyalty through superior customer service.

The bank is rated A by all three major credit rating agencies and completed two notable funding offers in the financial year. They were the bank’s first senior unsecured wholesale raisings since the start of the Global Financial Crisis and any improvements in wholesale funding markets would benefit Bendigo.

In a statement Hirst noted that while consumer confidence and the demand for credit remains low the outlook remains mixed. The bank’s shares traded flat on Monday, reflecting a result in line with expectations.

Foolish takeaway

Compared to the fully valued big four banks, the stock looks reasonably priced. It trades on an undemanding price to earnings ratio just over 12 with an attractive dividend yield of 5.7%. The bank remains in an ultra-competitive environment though and should be considered on a long-term basis.

Interested in our #1 dividend-paying stock? Discover The Motley Fool’s favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of “The Motley Fool’s Top Dividend Stock for 2013-2014.”

More reading


Motley Fool contributor Tom Richardson does not own shares in any of the companies mentioned in this article.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.