In the last week, the S&P/ASX 200 (INDEXASX: XJO) and broader Aussie share market has undergone what's known as a correction – a drop of 10% or more from the most recent highs.
Considering the ASX 200 was at nearly 7,200 points 2 weeks ago, but is currently sitting at 6,391 points before market open – it certainly feels like it too.
But falling share prices mean cheaper shares, and of course higher starting dividend yields. That's a blessing for investors looking to park cash they've had sitting in the bank earning next to no interest (in real terms anyway).
So today, let's look at how the kings of the ASX dividend scene – the big four ASX banks – are faring in the sell-off. And more importantly, which is of the big four is cheapest!
How are the ASX banks looking today?
Let's look at some numbers.
Commonwealth Bank of Australia (ASX: CBA) is currently asking $80.47 a share. This puts CommBank on a price-to-earnings (P/E) ratio of 14.6. CommBank shares have a trailing dividend yield of 5.36% (or 7.66% grossed-up) on this price.
This puts CommBank right in the middle of its 52-week range ($69.72–$91.05).
Meanwhile, Westpac Banking Corp (ASX: WBC) is sitting on $23.19 a share. That puts Australia's oldest bank on a P/E ratio of 12.23 and an eye-watering trailing dividend yield of 7.5% (or 10.71% grossed-up).
At these prices, Westpac is sitting close to the bottom of its 52-week range ($22.68–$30.05).
Then we have Australia and New Zealand Banking Group (ASX: ANZ). ANZ is asking $24.34 a share at the time of writing, which translates into a P/E ratio of 11.43. In terms of dividends, ANZ is offering a trailing yield of 6.57%, which only grosses-up to 8.55% because of ANZ's new 70% franking level.
ANZ is also quite close to the bottom of its 52-week range ($23.82–$29.30), so take from that what you will.
And last (and least by size), we have National Australia Bank Ltd (ASX: NAB). NAB is asking $24.47 a share, which (I hope you know what's coming by now) gives it a P/E ratio of 14.07. On this share price, NAB offers investors a trailing dividend yield of 6.78% (9.69% grossed-up with full franking).
Again, NAB shares are towards the lower end of their 52-week range ($23.89–$30).
Foolish takeaway
So there you have it. On the raw numbers, it appears ANZ takes the cake for 'cheapest' ASX bank on today's market. However, it's possible ANZ is being priced a little lower because of its lack of full franking, so an honourable mention goes to Westpac for being the lowest-priced bank with full franking.
In terms of gross yield, Westpac also wins, with NAB a hot second. But it is worth noting that 2020 is likely to be another year where bank dividends come under pressure, so watch this space carefully!
