Is the Australia and New Zealand Banking Group (ASX: ANZ) share price a buy?
The major ASX bank has had a solid start to September 2019, the ANZ share price is up 3.1%. This is perhaps no surprise considering we learned that national prices rose by 0.8% in August with Melbourne house prices rising by 1.4% and Sydney house prices going up 1.6%.
Perth and Darwin are still having a tough time, but other than that it seems as though the horrible 20%+ declines that some were predicting aren't going to eventuate, which is a good thing overall for the Australian economy.
The RBA and APRA have helped lending get going again, although some bank analysts think ANZ is falling behind in the mortgage sector and it's losing market share.
Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC) and National Australia Bank Ltd (ASX: NAB) have also been beneficiaries of this housing turnaround.
But, we'll soon see if lower interest rates lead to lower mortgage arrears for the big banks. You'd certainly hope so considering home loans should have seen around 0.5% come off the interest rate. That's a lot of money being left in borrowers' pockets to spend or save.
On the investment side of things, the big banks like ANZ may now appear to actually be decent 'cheap' value shares and may also be solid dividend ideas. ANZ currently offers a grossed-up dividend yield of 8.3%.
There are few shares on the ASX that generate a high level of annual cash profit that can afford a high yield like that. Some of the high yields on the ASX belong to listed investment companies (LICs) which rely on share prices going up, not just the underlying earnings.
Foolish takeaway
ANZ is trading at 12x FY20's estimated earnings. For the short-term this seems like a decent price, but over the longer-term I think there's too much competition from technology businesses looking to take a slice of earnings for ANZ to be a good market-beater.
