In the last 12 months the share price of Australia and New Zealand Banking Group (ASX: ANZ) has lost 28% of its value. This huge drop leaves Australia’s third-largest bank trading at just under 1.2x book value.

This makes it the cheapest of the big four banks based on the price to book ratio. But is it cheap enough for investors to buy today?

Although admittedly I have a preference for Westpac Banking Corp (ASX: WBC) at its current price, I do believe ANZ has most of the bad news that has plagued it in the last 12 months priced into its shares. This could well be a sign that now is a good time for bargain hunters to make an investment, but I would only recommend doing so if your portfolio is diverse enough to handle this.

After all too much exposure to the banking sector can be a wealth destroyer when things turn bad. So far this year the S&P/ASX 200 Financials (Index: ^AXFJ) (ASX: XFJ) index has lost approximately 10% of its value, compared to the diverse S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) which has lost just over 1% of its value. I feel this serves as a good example why it is recommended that we don’t put all our eggs in one basket when investing.

As well as being the cheapest of the big four banks, another thing that ANZ has going for it at the moment is its dividend. Even when you factor in the recent 7% cut to its interim dividend it still equates to an annualised fully franked 7% dividend.

This huge yield will be second only to National Australia Bank Ltd. (ASX: NAB) if it manages to maintain its respective dividend this year.

In his recent letter to shareholders chairman David Gonski acknowledged the difficult environment brought on by slower global growth, but appeared pleased with the progress ANZ was making. His aim is to build a simpler, stronger, and better balanced bank in the future. Whilst it may be a long road ahead, I feel the bank is moving forward and could be a good long-term investment today.

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Motley Fool contributor James Mickleboro has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.