It certainly has been a positive year so far for the Australia and New Zealand Banking Group (ASX: ANZ) share price.
This morning the ANZ share price has risen almost 0.5% to $28.46, which means the banking giant's shares have now gained a sizeable 17% since the start of 2019.
And if you throw in the 80 cents per share dividend that will be paid next week, this return increases to a whopping 21%.
Is it too late to buy ANZ shares?
Although ANZ is clearly not the bargain buy that it was at the start of the year, I still see a lot of value in its shares at the current level.
At present its shares change hands on a price to earnings ratio of 12.3x and a price to book ratio of 1.3x.
Whilst this is in line with its five-year average, with the Royal Commission out of the way and the housing market showing signs of rebounding, I would argue that things are looking a lot more positive for the bank now than they have been over the previous five years.
This could mean ANZ's shares deserve to trade at a slight premium to their five-year averages.
In addition to this, I would be a buyer due to the bank's positive underlying earnings growth prospects. This is due to its share buybacks, cost cutting opportunities, and a potential increase in mortgage loan growth. I expect this to allow ANZ to outperform its peers in respect to underlying earnings growth.
And let's not forget about the generous dividend yield that its shares offer. At present ANZ's shares provide a trailing fully franked $1.60 per share dividend, which equates to a yield of approximately 5.6%.
This is significantly better than term deposits, savings accounts, and the market average of ~4%.
It is for this reason that I would choose ANZ ahead of the Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), and Westpac Banking Corp (ASX: WBC). Though, admittedly, I think all the big four banks are decent options for income investors in this low interest rate environment.
