The month of July certainly has been a great one so far for the Australian Stock Exchange and the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) in particular. As we just edge past the halfway point the benchmark index is up almost 4% month-to-date despite its slow start.

Whilst the index has benefitted from gains across the board, the banking sector has proven to be a top performer after it pushed into overdrive in the last week and a half.

The two standouts in the banking sector have been Westpac Banking Corp (ASX: WBC) and Australia and New Zealand Banking Group (ASX: ANZ). During this period the shares of these two banking giants have risen by a solid 5.5% and 6.2%, respectively.

But is there still value in their shares?

Personally, I’m not sure we can class Westpac Banking Corp as a bargain anymore following the strong gains recently. Its shares may be trading at a much lower share price than a year ago, but I wouldn’t expect it to rise to that level for a long time to come.

Westpac shares are changing hands at 1.8x book value currently, which I would class as being about fair value.

ANZ on the other hand still remains reasonably cheap in my opinion, despite the 6.2% rise in its share price in the last week and a half. At just 1.3x book value I still see the potential for its shares to climb higher in the months ahead.

Considering at this price its shares are expected to provide an estimated fully franked 6.5% dividend this year according to CommSec, I see ANZ shares as a great option for income investors with little to no exposure to the banking sector already.

There are downside risks of course that investors must consider. A further capital raising in 2017 is without doubt the major one in many investors’ eyes. But at this point in time this is purely speculation and the potential share price gains combined with its market-beating dividend are enough to offset this in my view.

Finally, if you're after dividends but already have significant exposure to the banks then I would highly recommend these three fantastic blue chip ASX shares. Each pays a solid dividend and could provide share price gains in the months ahead as well in my opinion.

Discover the 'new breed' of blue chips that could take your portfolio higher in 2016

Forget BHP and Woolworths. These 3 "new breed" top blue chips for 2016 pay fully franked dividends and offer the very real prospect of significant capital appreciation. Click here to learn more.

The report is free! No credit card required.

HOT OFF THE PRESSES: Motley Fool’s #1 Dividend Pick for 2017!

With its shares up 155% in just the last five years, this ‘under the radar’ consumer favourite is both a hot growth stock AND our expert’s #1 dividend pick for 2017. Now we’re pulling back the curtain for you... And all you have to do to discover the name, code and a full analysis is enter your email below!

Simply enter your email now to receive your copy of our brand-new FREE report, “The Motley Fool’s Top Dividend Stock for 2017.”

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 https://www.fool.com.au/financial-services-guide">Financial Services Guide (FSG) for more information.

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.