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Kick Off: Australia and New Zealand Banking Group versus Transurban Group

We’re through to the semi-finals of the ASX World Cup and in the first match up we see heavyweight bank Australia and New Zealand Banking Group (ASX: ANZ) taking on toll road titan, Transurban Group (ASX: TCL).

Can Mike Smith’s team from ANZ overcome the boys led by Scott “Bobby” Charlton from Transurban? It looks like a tough task, so let’s take a look at both teams’ vital statistics…

Measure ANZ Bank Transurban
Market Cap $90.7 billion $14.3 billion
Last price $33.18 $7.55
Total shareholder return  – 10 years 12.4% 10.8%
Dividend Yield 5.2% 4.6%
Price to book 2.1x 3.4x

Source: CapitalIQ

Game On

Transurban scores an early goal after reporting that toll revenue for the 2014 financial year rose by 13% over the previous year to $907 million. But ANZ evens the score, with earnings per share growth of 18% forecast for the 2014 financial year.

Transurban takes the lead again, thanks to recent acquisitions of Sydney’s Cross City Tunnel and Queensland Motorways which the company bought as part of a consortium for $7 billion. That should see earnings grow in the future.

At half time, Transurban leads 2-1.

Going into the second half, ANZ’s Asian Strategy delivers early and the match is all tied up at 2-2. With credit growth in Australia hard to come by, ANZ’s Super Regional Strategy is paying dividends as it expands further into Asia.

Locally, ANZ is also growing its home loan portfolio faster than the other banks, and scores minutes before the final whistle. ANZ takes the lead for the first time in the match 3-2. Can Transurban take the match into extra time, with some hefty toll increases?

Not without taking the risk of travellers using alternative routes it can’t and ANZ wins the match 3-2. The company has truly shown its class has carried through from the group stage, where it managed to score a big win over Commonwealth Bank of Australia (ASX: CBA) and thumped National Australia Bank (ASX: NAB).

 

Should you buy ANZ now?

ANZ appears to have a lot of upside potential over the ultra-long-term but I believe the short and medium-term growth prospects are fully priced into the stock. As such, I'm waiting for a substantial setback in price before committing to a purchase.

However, for those who (like me) are unwilling to sit on their hands and wait for the stock to drop in value, there is one ASX stock which should be firmly on your buy list. For example, every year, Motley Fool investment advisor Scott Phillips hand-picks 1 ASX dividend stock with outstanding potential. Just click here to download your free copy of "The Motley Fool's Top Dividend Stock for 2014-2015" today.

Motley Fool writer/analyst Mike King doesn't own shares in any companies mentioned. You can follow Mike on Twitter @TMFKinga

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