It is a good day to be an Australia and New Zealand Banking Group Ltd (ASX: ANZ) shareholder.
That's because today is the day that the banking giant will be rewarding them with its latest dividend payment.
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The ANZ dividend
At the end of October, the big four bank released its results for the 12 months ended 30 September.
ANZ was on form in FY 2022 and reported a 16% increase in statutory profit after tax to $7,119 million and a 5% lift in cash profit from continuing operations to $6,515 million.
A key driver of its profit growth was an improvement in its net interest margin (NIM) thanks to rising rates.
In light of this profit growth, the ANZ board declared a fully franked final dividend of 74 cents per share, bringing its full year dividend to 146 cents per share. This was up from 142 cents per share in FY 2021.
Today is payday for that 74 cents per share final dividend, which equates to a very attractive 3.1% yield based on the current ANZ share price.
Should you buy shares?
The team at Citi is positive on the bank and currently has a buy rating and $29.25 price target on its shares. This implies potential upside of almost 22% for investors over the next 12 months.
In addition, the broker is expecting the ANZ board to lift its dividend by almost 14% to $1.66 per share in FY 2023. This equates to a mouth-watering 6.9% dividend yield at current prices.
Citi commented:
[FY 2022's] exit NIM of 1.80% is likely to drive material consensus revenue upgrades, and we think the street upgrades core earnings. We retain our Buy call, with core earnings momentum and benign asset quality.
