Is Westpac Banking Corp (ASX:WBC) the best bank share to buy on the ASX 200?

Credit: Kiwiteen123

The last 12 months certainly haven’t been kind for the Westpac Banking Corp (ASX: WBC) share price.

During this time the banking giant’s shares have fallen almost 19% compared to the market’s decline of approximately 2%.

Is it time to invest?

First things first. Westpac is due to release its full year results on November 5. As a rule, I avoid investing in shares ahead of a results release or trading update as you can never be quite sure what will be announced.

But if Westpac’s results are in line with expectations, then I feel that it would be a great option for investors that don’t have exposure to the banking sector.

This is especially the case for investors that are in search of dividends. Based on today’s close price, Westpac’s shares currently offer a trailing fully franked 7% dividend.

And according to a note out of Goldman Sachs this month, it expects Westpac to maintain this dividend in FY 2019.

After which, the broker has forecast Westpac increasing this dividend to 195 cents per share in FY 2020. This will be an increase of 3.7% on FY 2019’s dividend according to Goldman’s forecasts.

As you might have guessed from its positive forecasts for the bank, Goldman also feels that Westpac’s shares are in the buy zone.

While its first pick in the sector remains Australia and New Zealand Banking Group (ASX: ANZ), the broker has a buy rating and $34.73 price target on Westpac’s shares.

This price target implies potential upside of 29% for its shares over the next 12 months excluding dividends. If you add in its forecast $1.88 dividend, this potential return extends to almost 36.5%.

Although I think this price target might be a little ambitious given how weak investor sentiment is right now, I believe a solid result and outlook could put its shares on a path beyond $30.00 again.

But as I said at the start, I feel it may be best to wait for its results release before making a move.

In the meantime, this top dividend share could be the one to buy today.

The best dividend share on the ASX right now

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. 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 Scott Phillips.

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