ANZ Group Holdings Ltd (ASX: ANZ) shares could well be the pick of the litter for passive income investors.
The S&P/ASX 200 Index (ASX: XJO) bank stock has a long track record of paying two annual dividends going back more than a decade. Even in the Covid addled year of 2020.
And, with the exception of the past two dividends, which were franked at 56% and 65%, respectively, ANZ's dividends have been fully franked. Meaning you could be able to hold onto more of that passive income at tax time.
Now you may be saying that the other big four ASX 200 bank stocks also attract passive income investors with their reliable, twice-annual dividend payments.
And you'd be right.
But here's the thing.
Not only do ANZ shares trade at the lowest price-to-earnings (P/E) ratio of any of the big four Aussie banks, but ANZ also offers the highest dividend yield.
Let's have a look at the numbers.
Banking on ANZ shares for passive income
Over the past 12 months, ANZ shares have, as expected, paid out two dividends.
Eligible shareholders will have received the final dividend of 94 cents per share on 22 December. The interim dividend of 83 cents per share was paid on 1 July.
This was up 2.5% from the prior interim dividend despite the bank's half-year cash profits slipping 1.0% year on year to $3.55 billion.
"We've driven a lot of productivity gains, and we take those gains by getting more efficient and some of those go back to our shareholders in the form of dividends and others, a lot of it, gets reinvested into the business," ANZ CEO Shayne Elliot said of the boosted passive income payout at the time.
All told then, ANZ has paid out $1.77 a share in dividends over the last 12 months.
At the current ANZ share price of $31.68, that sees the bank stock trading on a partly franked trailing yield of 5.6%.
As for the passive income you'll get from the other three ASX 200 bank shares, which, as mentioned, all trade at higher P/E ratios:
- National Australia Bank Ltd (ASX: NAB) shares trade on a fully franked trailing yield of 4.3%
- Westpac Banking Corp (ASX: WBC) shares trade on a fully franked trailing yield of 5.0%
- Commonwealth Bank of Australia (ASX: CBA) shares trade on a fully franked trailing yield of 3.2%
And despite some potential headwinds building for the banking sector in FY 2025, the analysts at UBS are forecasting ANZ will pay out $1.69 a share in partly franked dividends in the new financial year.
Atop the past year's juicy dividends, ANZ shares are up 25% in 12 months.
