Motley Fool Australia

Motley Fool Australia

Since 1993, millions of investors have trusted The Motley Fool for simple, down-to-earth investing research.

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.

The One ASX Pick You MUST Add to Your Portfolio

Top Motley Fool analysts just identified their #1 ASX pick for 2014, a small-cap stock that could be poised for big gains (and offers a fat, fully franked dividend!).

Discover all the details now, including the name and code, in this FREE investment report, "The Motley Fool’s Top Stock for 2014."

See all posts by Tom Richardson
The Motley Fool