Should you buy ANZ (ASX:ANZ) shares in August 2021 for the dividend yield?

Is it too late to buy ANZ shares?

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A smiling woman with a handful of $100 notes, indicating strong dividend payment by Thorn Group

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Australia and New Zealand Banking GrpLtd (ASX: ANZ) shares are up an impressive 21% in 2021.

In light of this, investors may be wondering if it is too late to buy its shares for its dividend.

Is it too late to buy ANZ shares for its dividend yield?

The good news is that it doesn’t appear to be too late to buy ANZ shares despite their impressive gain this year.

According to a recent note out of Bell Potter, its analysts have a buy rating and $30.00 price target on the bank’s shares.

Based on the current ANZ share price of $27.92, this implies potential upside of 7.5% over the next 12 months before dividends. And if you include the ANZ dividend, this potential return gets even more attractive.

Bell Potter is forecasting fully franked dividends per share of 140 cents in FY 2021, 146 cents in FY 2022, and 154 cents in FY 2023. This represents yields of 5%, 5.2%, and 5.5%, respectively, over the coming years.

Is anyone else bullish?

Goldman Sachs and Morgans are even more bullish on ANZ shares. The former has a buy rating and $30.50 price target, whereas the latter currently has an add rating and $34.50 price target.

Morgans’ price target of $34.50 suggests that there is upside of 23% over the next 12 months for ANZ shares.

The broker has also pencilled in dividends per share of 145 cents in FY 2021 and 165 cents in FY 2022. This implies fully franked yields of 5.2% and 5.9%, respectively, over the next two years. This stretches the total potential return to over 28%

Morgans was pleased with ANZ’s announcement of a $1.5 billion share buyback and suspects that there could be more to come once trading conditions return to normal.

All in all, based on what these brokers are saying, it may not be too late to buy ANZ for its dividends.

Should you invest $1,000 in ANZ right now?

Before you consider ANZ, you'll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and ANZ wasn't one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. 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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