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3 reasons the Westpac (ASX:WBC) share price just hit a 52-week high

woman throwing arms up in celebration whilst looking at asx share price rise on laptop computer
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The Westpac Banking Corp (ASX: WBC) share price has continued its positive run on Thursday.

In fact, at one stage today, the banking giant’s shares hit a 52-week high of $25.38.

When the Westpac share price hit that level, it meant it was up a remarkable 29% since the start of the year.

Here are three reasons why the Westpac share price is flying high right now:

Strong first quarter update

One reason the Westpac share price is at a 52-week high is its strong first quarter update in February. For the three months ended 31 December, the bank posted a $1.97 billion first quarter cash profit. This was up a massive 144% over the quarterly average cash earnings of $808 million it achieved in the second half of FY 2020. Another big positive from the result was its impairment benefit of $501 million. Westpac reversed a portion of its COVID provisions due to improved credit quality, stronger economic outcomes, and a better economic outlook.

Improving dividend outlook

Also getting investors excited has been Westpac’s dividend outlook. Thanks to the improving economy, a booming housing market, and the removal of dividend restrictions by APRA, Westpac and the rest of the big four banks look well-positioned to grow their dividends in the coming years. In addition to this, Westpac’s exceptionally strong capital position means it could return excess funds to shareholders via buybacks in the near future.

Positive brokers

Another reason the Westpac share price is on fire this year is the bullish views of a number of leading brokers. One of those is Morgans, which earlier this week put the bank on its best ideas list for April. The broker currently has an add rating and $27.50 price target on its shares. In addition to this, going back to its improving dividend outlook, the broker is forecasting dividends of $1.32 per share in FY 2021 and then $1.43 per share in FY 2022. This represents fully franked yields of 5.2% and 5.6%, respectively.

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Motley Fool contributor James Mickleboro owns shares of Westpac Banking. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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