The Motley Fool

Top analysts tips ANZ share price to go higher

For many SMSF or institutional investors you just cannot beat blue-chip bank shares for big fully franked dividend yields.

In fact Australia & New Zealand Bank (ASX: ANZ) offers a term-deposit-thumping 6.5% dividend yield plus full franking credits based on Goldman Sach’s forecast for it to hold its FY 2020 dividend steady at $1.60 per share. 

According to a December 5 note of out of Goldman’s research desk ANZ Bank should be able to meet tough new capital requirements imposed by the RBNZ with retained earnings from its New Zealand operations.

Importantly, Goldman’s expect the bank can do this without changing how much capital is channels from NZ operations to group operations. 

In total the major Australian banks are expected to have to find another NZ$20 billion in new capital or around NZ$5 billion each to meet the RBNZ’s new capital requirements over the next seven years.

Despite this regulatory blow Goldman’s still values ANZ shares at $26.76 over the next 12 months. That means it has around 9 per cent upside plus dividends of $1.60 per share if Goldman’s analysis is on the money.

Elsewhere, as at December 5, it’s tipping Commonwealth Bank of Australia (ASX: CBA) stock as a ‘sell’ and has a buy rating on National Australia Bank Ltd (ASX: NAB) shares. 

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of National Australia Bank Limited. 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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