The ANZ Bank (ASX:ANZ) share price is down 9% in 3 months: Time to buy shares?

The Australia and New Zealand Banking Group (ASX: ANZ) share price has dropped lower with the market on Tuesday.

In early afternoon trade the banking giant’s shares are down almost 1% to $26.49.

This decline means that its shares have fallen 9% over the last three months.

Is this a buying opportunity?

I think it could be a buying opportunity for investors that don’t already have meaningful exposure to the banking sector.

After all, ANZ Bank’s shares are currently changing hands at just 10x earnings and 1.3x book value, which is a reasonable discount to their average over the last decade.

In addition to this, the bank’s shares offer a trailing fully franked 6% dividend at present. This is notably higher than the market average and especially attractive in this low interest rate environment.

I’m not the only one that likes ANZ Bank at these levels. A recent note out of Goldman Sachs reveals that its analysts still have its shares on their ANZ conviction buy list with a $31.52 price target.

According to the note, the bank is Goldman’s preferred major bank exposure based on its view that it is best positioned of the major banks to face into the sector’s slowing revenue environment.

This is because of opportunities for the bank to make further absolute cost reductions, reduce its share count by deploying surplus capital via buybacks, and due to its lower bad and doubtful debt charge given its structural shift in its portfolio.

Goldman believes that the bank’s FY 2018 result was “further evidence that it is able to simultaneously pull all three of these levers” and expects more of the same in FY 2019.

While my preference remains Westpac Banking Corp (ASX: WBC) shares, I think both banks have the potential to generate solid total returns over the next 12 months and would suggest investors choose them ahead of rival Commonwealth Bank of Australia (ASX: CBA).

Top 3 ASX Blue Chips To Buy For 2019

For many, blue chip stocks mean stability, profitability and regular dividends, often fully franked…

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool’s in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of The Motley Fool’s Top 3 Blue Chip Stocks for 2019.

Each one pays a fully franked dividend. The names of these Top 3 ASX Blue Chips are included in a specially prepared FREE report. But you will have to hurry. Depending on demand – and how quickly the share prices of these companies moves – we may be forced to remove this report.

See the 3 blue chip stocks

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.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

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 Financial Services Guide (FSG) for more information.