They are owned for yield, not growth, and they tend to move slowly in both directions.

TPG Telecom Ltd (ASX: TPG) has offered investors rather less stability than the sector's reputation might suggest, with shares down 30% over the past twelve months.

But this week's Investor Day contained a commitment that income investors specifically should pay close attention to.

What TPG said at its Investor Day

TPG Telecom held its annual Analyst and Investor Day on Tuesday 3 June 2026.

The company presented a first-half 2026 trading update alongside its medium-term strategic direction.

TPG delivered two important messages for income investors.

First, mobile service revenue continues to grow strongly. The company forecasts 70,000 to 80,000 new mobile subscribers in the first half of FY2026. EBITDA growth is also expected to outpace revenue growth as the company's cost discipline takes hold.

Second, and most importantly for dividend investors, management confirmed that dividend growth is expected to continue in line with sustainable profit and cash flow growth.

This is a meaningful upgrade to the dividend policy from prior years when capital was being prioritised for debt reduction.

The financial transformation behind the dividend commitment

The dividend growth commitment is credible because of the financial transformation underpinning.

In FY2025, TPG's operating free cash flow almost doubled to $1.91 billion. This was a dramatic improvement from prior years when heavy capital expenditure on the mobile network consumed the bulk of cash generation.

Net bank borrowings fell from $4.1 billion to $1.361 billion over the same period, dramatically reducing the financial risk that had previously constrained dividend capacity.

Total FY2025 dividends paid were $0.18 per share, franked at 30%.

Management is now guiding for FY2026 EBITDA of $1.665 billion to $1.735 billion and capital expenditure of approximately $750 million.

This combination implies continued strong free cash flow generation and growing capacity to lift the dividend.

The current yield picture

At the current TPG share price, the trailing dividend yield sits at approximately 4.9% on a partially franked basis.

This yield does not compare unfavourably to the big four banks, particularly ANZ Group Holdings Ltd (ASX: ANZ) and Westpac Banking Corp (ASX: WBC), which carry their own earnings risks in the current high-rate environment.

Furthermore, the partially franked dividend does carry some franking credit value for Australian taxpayers. This should improve their effective after-tax yield above the headline figure.

The key question for income investors is not the current yield but the trajectory.

A business with nearly doubling free cash flow, dramatically lower debt, and a new dividend growth policy is precisely the setup from which reliable income growth tends to emerge over a three to five-year horizon.

The risks worth knowing

TPG's broadband subscriber base has been declining as the company shifts focus toward mobile and away from legacy fixed-line services.

This transition has created some revenue headwinds in the near term that management is working to offset through cost reduction and mobile subscriber growth.

The company also flagged that spectrum renewal costs from 2028 represent a capital expenditure risk that will need to be managed carefully.

Competition from Telstra (ASX: TLS) and Optus in the mobile market remains intense, and any meaningful loss of mobile market share would directly threaten the earnings trajectory that underpins the new dividend policy.

Foolish takeaway

TPG shares have underperformed the market significantly over the past year.

That underperformance has created a more attractive entry point for income investors than has been available in some time.

A dividend growth commitment backed by nearly doubling free cash flow and dramatically reduced debt is not something to overlook.

For patient income investors comfortable with a telco turnaround story, TPG shares deserve serious consideration.

The post TPG Telecom just raised its dividend. Here's what that means for income investors appeared first on The Motley Fool Australia.

What happened to the ASX 200 big four major banks in May?

Australia's banking sector is dominated by the big four banks: Commonwealth Bank of Australia (ASX: CBA), Westpac Banking Corp (ASX: WBC), National Australia Bank Ltd (ASX: NAB), and ANZ Group Holdings Ltd (ASX: ANZ). 

Together, they make up around a quarter of the S&P/ASX 200 Index (ASX: XJO) by market capitalisation. 

CBA shares fell 5.6% in May and are trading around 1% lower again for the first day of June. At the time of writing, the ASX 200 bank shares are changing hands for $163.87 a piece.

Westpac shares fell 6.5% throughout the month, and are largely flat at the time of writing on Monday, at $36.02 a piece.

NAB shares also fell by 6.4% in May. At the time of writing, the bank shares are marginally higher, up around 0.4% to $37.48 each.

ANZ shares suffered a slightly smaller slump in May versus its peers. The bank stock fell 4% in May and has continued tumbling into the first day of June. At the time of writing, the shares are down around 0.5% to $35.03 a piece.

What about the mid-tier banks?

Bendigo and Adelaide Bank Ltd (ASX: BEN) shares fell 3.3%, and Bank of Queensland Ltd (ASX: BOQ) dropped nearly 7% in May. 

Macquarie Group Ltd (ASX: MQG) was the best performer by far and the only ASX 200 bank that saw a gain throughout the month. Its shares climbed around 1.5% in May.

It looks like Macquarie largely escaped the May bank sell-off. This is likely because it posted a stronger-than-expected FY26 result in the first week of the month.

Which ASX banks are a buy for June?

Macquarie Group is also the only ASX 200 bank share that brokers think can keep climbing higher.

Market Index data shows brokers have a buy rating on Macquarie Group shares. It tips around a 7% upside to $253.75 at the time of writing. 

Which ASX banks are a sell?

Analysts are concerned that CBA shares are still overvalued versus their peers. Market Index data shows brokers hold a strong sell rating on the ASX 200 bank's shares. They tip a potential average 23.85% downside to $124.20 at the time of writing.

Brokers also rate Westpac shares a strong sell and tip a 6% downside to an average target price of $33.97 over the next 12 months.

NAB shares are a sell, but the average $39.21 target price still implies a potential 5% upside, at the time of writing.

Meanwhile, Bank of Queensland shares are rated a sell and are tipped to fall just over 1% to $6.14 each.

Which ones are a hold?

Brokers rate ANZ shares as a hold, and they tip a 3.2% potential upside to an average $36.20 target price, at the time of writing. 

Bendigo shares are also rated a hold, and brokers tip a 3% upside to an average target price of $10.66.

The post Are ASX 200 bank shares a buy in June? appeared first on The Motley Fool Australia.

The ASX bank share typically has a higher dividend yield than competitors like Commonwealth Bank of Australia (ASX: CBA) and Macquarie Group Ltd (ASX: MQG), and a similar yield to names like National Australia Bank Ltd (ASX: NAB) and Westpac Banking Corp (ASX: WBC).

Thankfully, ANZ's dividend has recovered significantly since the COVID-hit year of 2020.

The recent FY26 half-year result was another example of the ASX bank's share stability for shareholders.

In that HY26 result, ANZ maintained its interim dividend per share at 83 cents following the bank's underlying cash profit before provision growth of 12%, while the underlying cash profit grew 14%.

In this article, we're going to look at the annual FY27 dividend, which will be paid in 2027.

2027 dividend projection for owners of ANZ shares

According to the projection on CMC Invest, the ASX bank share is projected to pay an annual dividend per share of $1.70 in the 2027 financial year.

At the time of writing, this forecast translates into a dividend yield of 4.75% excluding franking credits and a grossed-up dividend yield of approximately 6.3% including franking credits.

If someone were to invest $8,000 in ANZ, they would be able to buy 224 ANZ shares (with a little bit of money left over).

With those 224 ANZ shares, investors could receive $380.80 of cash and some franking credits, the level of franking credits are not known at this stage because the ASX bank share is only paying partially franked dividends.

Is this a good time to invest in the ASX bank share?

According to CMC Invest, there have been 10 analyst ratings calls on the business in the last three months.

Of those 10, four of them were a buy, five were a hold and one was a sell. So, the investment professionals are, on average, neutral on the appeal of the company's valuation right now.

The average price target of those 10 ratings is $35.14. That means, collectively, those analysts are predicting the ANZ share price will (at the time of writing) hardly move over the next year.

In the last 12 months, the ANZ share price has been above $40 and below $30, so it's probably about fair it's roughly in the middle now.

For now, there seem to be more compelling ASX shares out there to buy.

The post If I invest $8,000 in ANZ shares, how much passive income will I receive in 2027? appeared first on The Motley Fool Australia.

Meanwhile, brokers have indicated continued confidence in several ASX 200 shares, issuing renewed buy calls this week.

Let's review.

Goodman Group (ASX: GMG)

The Goodman share price is $31.39, up 2% today.

The ASX 200 real estate share has risen 2% in the calendar year to date (YTD).

Morgans renewed its buy rating on Goodman shares on Thursday.

The broker raised its 12-month share price target from $32.45 to $36.

This suggests a potential 15% upside ahead.

ANZ Group Holdings Ltd (ASX: ANZ)

The ANZ share price is $35.27, up 1.1% today.

This ASX 200 bank share has fallen 2.5% over the past month.

Citi reiterated its buy rating on ANZ shares with a price target of $40 on Monday.

This implies potential capital gains of 13% ahead.

Ora Banda Mining Ltd (ASX: OBM)

The Ora Banda share price is $1.37, up 7.6% today.

This ASX 200 gold share has fallen 10.9% YTD.

Canaccord Genuity reiterated its buy rating with a $2.25 target this week.

This implies a potential 64% upside ahead.

Codan Ltd (ASX: CDA)

The Codan share price is $42.13, up 2.7% today.

This ASX 200 tech share has rocketed 45% YTD.

Canaccord Genuity reaffirmed its buy rating with a 12-month target of $47.05.

This suggests a potential 11% upside ahead.

Judo Capital Holdings Ltd (ASX: JDO)

The Judo share price is $1.56, up 12% today.

This ASX bank share has fallen 14% YTD.

Citi renewed its buy rating on Judo shares with a $2.20 target today.

This implies potential capital growth of 40% over the next year.

Mineral Resources Ltd (ASX: MIN)

The Mineral Resources share price is $72.99, up 3.1% today.

This ASX 200 mining share is up 32% YTD.

UBS renewed its buy rating on Mineral Resources shares this week.

The broker raised its share price target from $73 to $83.

This implies potential capital growth of 14% over the next year.

Flight Centre Travel Group Ltd (ASX: FLT)

The Flight Centre share price is $10.99, up 8.8%.

This ASX 200 travel share is down 27% YTD.

Jefferies has reaffirmed its buy rating on Flight Centre shares with a $14 target.

This suggests a potential 28% capital gain ahead. 

Guzman Y Gomez Ltd (ASX: GYG)

The Guzman y Gomez share price is $19.49, up 0.5% today.

This ASX 200 consumer discretionary share has fallen 16% over six months.

Last week, the Mexican restaurant chain upgraded its earnings guidance and announced it was exiting the US.

Morgans renewed its buy rating on Guzman y Gomez shares on Monday.

The broker upped its price target from $26.70 to $29.40.

This suggests a potential 50% upside ahead.

Santos Ltd (ASX: STO)

The Santos share price is $7.77, down 1.1% today.

This ASX 200 energy share has lifted 26% due to higher oil and gas prices in 2026.

UBS renewed its buy rating on Santos shares with a $8.60 target on Thursday.

This suggests a potential 11% upside ahead.

The post 9 ASX 200 shares with renewed buy ratings this week appeared first on The Motley Fool Australia.

The S&P/ASX 200 Banks Index (ASX: XBK) is down 2.1% today while the broader benchmark index is down 2%.

The sector's No. 1 share, Commonwealth Bank of Australia (ASX: CBA), is leading the pack lower, down 2.5% to $160.67.

What's happening with ASX 200 bank shares?

ASX 200 bank shares are facing many headwinds today.

Morgan Stanley reckons there's a 5% earnings downgrade ahead, purely due to capital gains tax (CGT) changes in the Federal Budget, which may impact lending growth to property investors.

On top of that, there are macroeconomic challenges afoot, which tend not to bode well for bank stocks.

Consumer confidence is at a five-year low after three interest rates rises.

We've just seen the first signs of weakness in the jobs market, with unemployment rising to 4.5% last month.

And we're a long way off seeing the full long-tail impact of the global oil shock.

Amid this, the banks are trading on stretched valuations and falling trailing dividend yields.

You can compare ASX 200 bank share dividend yields with rising risk-free savings deposit rates beyond 5.5% for further data.

Portfolio manager Suhas Nayak from contrarian fund manager Allan Gray says ASX 200 bank shares look less attractive today.

Nayak told The Australian:

The total returns from here look not as appealing as many other parts of the market.

With all of this in mind, let's check out some new ratings on three of the five major ASX 200 bank shares.

Macquarie Group Ltd (ASX: MQG)

The Macquarie share price is $234.45, down 0.8% today and up 1.1% over the past month.

Morgan Stanley reiterated its buy rating on Macquarie shares with a 12-month price target of $263 this month. 

This implies 12% upside ahead.

ANZ Group Holdings Ltd (ASX: ANZ)

The ANZ share price is $34.81, down 2.2% today and down 3.4% over the past month.

UBS recently upgraded ANZ shares to a hold rating with a $36.50 price target.

That implies 5% upside from here.

Westpac Banking Corp (ASX: WBC)

The Westpac share price is $35.77, down 1.7% today and down 7.4% over the past month.

Morgan Stanley reiterated its sell rating on Westpac shares last week.

The broker has a target of $34 for Westpac shares, suggesting a 5% fall from here.

The post Buy, hold, sell: ANZ, Macquarie, Westpac shares appeared first on The Motley Fool Australia.

Saying that, if you are looking for an ETF that offers up a dividend yield greater than 4% today, your choices are far more nuanced. In fact, only a handful of funds still offer yields of that size. Even the broad-based index funds, long famed for their fat dividends, aren't in that ballpark. VAS, for example, currently trades on a trailing yield of 3.14% (as of yesterday's closing price).

That's why, if you're an investor who prioritises maximising dividend cash flow above all else, you may wish to consider the VanEck Australian Banks ETF (ASX: MVB) today.

This is a very simple ASX ETF. As its name implies, MVB gives investors access to an underlying portfolio of ASX bank shares. It keeps things simple, with just seven bank stocks in its portfolio at present. As one might expect, the big four are all there, and take up a lot of room.

Which ASX bank shares are in this dividend ETF?

As it currently stands, Commonwealth Bank of Australia (ASX: CBA) shares are at the top of the pile, taking up about 20% of MVB's portfolio. ANZ Group Holdings Ltd (ASX: ANZ) is next, contributing 19.9%, followed by Westpac Banking Corp (ASX: WBC)'s 18.9%.

National Australia Bank Ltd (ASX: NAB) accounts for a further 17%.

Then we have two of the ASX's smaller bank shares. Bendigo and Adelaide Bank Ltd (ASX: BEN) and Bank of Queensland Ltd (ASX: BOQ) are the smallest holdings in the VanEck Australian Banks ETF.

That's six. So what about number seven? Well, that would be the ASX's 'fifth bank', the millionaire's factory, also more formally known as Macquarie Group Ltd (ASX: MQG). Macquarie, although not a pure bank, is MVB's largest holding, making up 21.4% of the entire portfolio.

As such, the VanEck Australian Banks ETF can be thought of as a 'seven-for-the-price-of-one' investment in the Australian financial sector.

But let's talk dividends.

Over the past 12 months, investors have received four dividend distributions from MVB. These total $2.19 per unit. At the last MVB unit price of $42.52, that gives the VanEck Australian Banks ETF a trailing dividend distribution yield of 5.15%. Those came with an average franking level of 91%.

There's no guarantee buying MVB units today will secure you that kind of yield going forward, of course. No ASX dividend share or ETF can promise that. However, given the high levels of income ASX bank shares tend to pay out, I'd be surprised if this ETF didn't remain a reliable source of income for the foreseeable future.

The post This ASX bank ETF has a 5.2% dividend yield right now appeared first on The Motley Fool Australia.

At the time of writing, the benchmark index is up 0.21% to 8,675 points.

The move isn't huge, but it's notable given the market was under pressure earlier in the session.

The ASX 200 traded as low as 8,625.8 points before recovering after the April inflation numbers landed.

The index is still down 0.44% in 2026 and around 1.26% over the past month. Over the past year, however, it remains up about 3.19%.

Inflation gives investors a reason to buy

The Australian Bureau of Statistics (ABS) said annual inflation eased to 4.2% in April, down from 4.6% in March. The fall was helped by lower automotive fuel prices, which dropped 7% over the month after the federal fuel excise cut.

That was enough to settle some nerves after a weaker start to the session.

Lower headline inflation can reduce pressure on the Reserve Bank of Australia (RBA) to keep lifting interest rates.

It also helps explain why investors were more willing to buy stocks after the data was released.

But the report wasn't all good news.

Trimmed mean inflation, which strips out some volatile price moves, rose to 3.4% over the year. That was up from 3.3% in March and remains above the RBA's 2% to 3% target band.

Why the RBA question is not settled

Today's inflation update may reduce the chance of another rate rise in June, but it doesn't close the door on more tightening later this year.

The RBA has already lifted the cash rate 3 times this year, taking the cash rate target to 4.35%.

That is already putting pressure on households, especially mortgage holders rolling onto higher repayments.

The problem for the RBA is that the headline inflation number is only one part of the picture.

Annual inflation has eased, but the underlying measure is still moving the wrong way.

It also explains why the market reaction has been positive, but not overly excited.

Investors have enough in the numbers to justify some buying today. They do not have enough to assume the inflation fight is finished.

Banks weigh while tech helps

The recovery has not been spread evenly across the market.

The major banks are still dragging on the index, with Commonwealth Bank of Australia (ASX: CBA) shedding 0.60% to $163.32, Westpac Banking Corp (ASX: WBC) down 1.46% to $36.08, National Australia Bank Ltd(ASX: NAB) slipping 1% to $37.23, and ANZ Group Holdings Ltd (ASX: ANZ) edging 0.98% lower to $35.31.

Tech shares are doing more of the heavy lifting.

Dicker Data Ltd (ASX: DDR) is surging 7.86% to $9.61, Megaport Ltd (ASX: MP1) is climbing 7% to $14.75, and Siteminder Ltd (ASX: SDR) is up 6.5% to $3.04.

The post ASX 200 rises as inflation surprise leaves investors with one big question appeared first on The Motley Fool Australia.

Then came the federal budget, and details of proposed changes to the capital gains tax (CGT).

People already knew the Federal Government was considering CGT changes for property investments to improve housing affordability.

What they didn't expect was CGT changes on all asset classes, including ASX shares and businesses.

That changes the game, according to some experts.

CGT changes magnify importance of yield

Some experts reckon higher taxes on capital gains will likely amplify the appeal of yield over growth for some investors.

Private wealth and investment advisory firm, Medallion Financial Group, said:

At a high level, the changes tilt the playing field toward yield. If a larger portion of capital gains is taxed away, the after-tax return profile of growth assets; equities, start-ups, and expansionary investments becomes less compelling.

This might enhance the appeal of ASX dividend shares, or exchange-traded funds (ETFs) tracking the S&P/ASX 200 Index (ASX: XJO).

ASX dividend shares deliver a much higher yield than international shares, but they aren't what they used to be.

Historically, income investors have relied on ASX 200 bank and mining shares to deliver generous dividend yields.

But the average dividend yield for the ASX 200 has fallen below 3.5%.

And this may start looking a little weak to income investors, given risk-free savings deposit rates have now risen above 5.5%.

Savings deposit interest rates

Savings deposit rates are not only attractive now, they're likely to go even higher given expectations of further rate rises this year.

Some examples in the market today include a 5.75% ongoing but conditional savings rate offered by Westpac Banking Corp (ASX: WBC) to customers aged 18 to 34 via its Westpac Life product.

ING offers a 5.5% ongoing but conditional rate via its Savings Maximiser product.

These are not short-term intro savings rates that last only a few months.

They are ongoing, everyday interest rates that apply as long as you meet certain conditions every month, such as increasing your balance by a certain amount.

Those yields are certainly appealing, but here's the thing.

If you're a long-term investor, you are still likely to do better with ASX dividend shares over savings, even if you pay a bit more CGT.

This is because ASX dividend shares offer both capital growth and yield.

Savings accounts just deliver yield (which inflation then eats into as well).

So, remaining invested in assets that also deliver reliable growth over the long term is protective.

The following chart shows the current trailing dividend yields of the top 10 ASX 200 shares by market capitalisation.

As you can see, some stocks have dividend yields above today's savings deposit rates, while some are below.

And nine out of 10 have delivered solid average annual capital growth over the past five years.

Even if you pay more tax on gains in the future, growth plus yield still looks to be a compelling combination, depending on your goals.

Food for thought.

Top 10 ASX 200 shares: Dividend yields and capital growth

The post How do ASX dividend shares compare to savings deposit rates today? appeared first on The Motley Fool Australia.

At the time of writing, the Commonwealth Bank of Australia (ASX: CBA) share price is $162.99, down 1% today.

The National Australia Bank Ltd (ASX: NAB) share price is $37.54, down 1.9%.  

ANZ Group Holdings Ltd (ASX: ANZ) shares are $35.37 apiece, down 1.1%.

Westpac Banking Corp (ASX: WBC) shares are also 1.1% lower at $36.38.

Macquarie Group Ltd (ASX: MQG) shares are down 1.5% at $233.95.

Today, the world is waiting for further news on an impending US-Iran deal that would reopen the Strait of Hormuz.

Oil prices have dropped significantly in anticipation of the key shipping channel reopening after nearly three months of effective closure.

The Brent Crude oil price is currently US$97.72 per barrel, down 12% in a week.

Regardless of when the war ends, economists say the full economic effect of the oil shock is yet to play out.

The question is not whether the impact will be bad, but rather, how bad.

The Australian Bureau of Statistics reported today that 72% of Australian businesses are under pressure due to higher fuel costs.

Higher petrol and diesel prices, along with three interest rate rises this year, have contributed to a multi-year low in consumer sentiment.

Rates have gone up due to resurgent inflation. That started before the war began, and it's now been exacerbated by higher fuel prices.

We've also just seen the first sign of a weakening jobs market. Unemployment rose to 4.5% in April amid 18,600 job losses.

On top of all that, proposed changes to capital gains tax (CGT) are worrying businesses and investors in shares and property.

Top broker predicts impact of CGT tax changes

In a new note, analysts from top broker Morgan Stanley said softer mortgage growth and margin headwinds stemming from the proposed CGT changes could result in FY27 earnings downgrades of about 5% for the major ASX 200 bank shares.

This is because the banks are highly exposed to the residential housing market, which is already weakening due to higher interest rates.

The analysts said a deterioration in housing market sentiment would raise the probability of lower valuation multiples for bank stocks.

Concern about the impact of CGT changes was partly behind a 10% daily drop for CBA shares earlier this month.

That was the biggest one-day fall for CBA shares ever.

It followed the bank's 3Q FY26 update, which was released the morning after the Federal Budget.

CBA reported an unaudited cash net profit after tax (NPAT) of $2.7 billion, down 1% on the quarterly average for 1H FY26.

Investors also noticed the $200 million increase to bad debt provisions, which CBA attributed to higher geopolitical and economic risks.

Will ASX 200 bank shares fall?

ASX 200 bank share price movements are often seen as a barometer of investor confidence in the economy.

And right now, the economy isn't looking great.

Consumer confidence is near pandemic lows; higher inflation and interest rates are expected; we have entrenched low productivity growth; the first signal of a weakening jobs market; and the impending long-tail impact of the global oil shock and changes to CGT tax on top.

Additionally, when any ASX stock trades on a stretched valuation, it's natural to assume that mean reversion will occur at some point.

ASX 200 bank shares have been on the up since November 2023. The big five have all reset their record highs over the past year.

The following chart showing percentage changes in ASX 200 bank share prices since November 2023 paints a picture.

Portfolio manager Suhas Nayak from contrarian fund manager Allan Gray says the major ASX 200 banks are trading at rich levels today.

Four of the major five are trading on a price-to-earnings (P/E) ratio of 18 times to 19 times, compared to the historical average of 12 times.

And CBA shares are out on their own at 26.7 times.

Nayak told The Australian that this presents a risk for share prices:

It just exposes you to valuation risks across those particular companies that have done particularly well.

What about bank dividends?

An additional factor that may increasingly weigh on ASX 200 bank shares is their declining dividend yields.

As ASX 200 bank share prices have stormed higher, earnings have not kept pace, so dividend yields have reduced.

This makes ASX 200 bank shares less attractive to investors focused on passive income. (Find out current bank dividend yields here).

Nayak said:

The total returns from here look not as appealing as many other parts of the market.

Morgan Stanley has a sell rating on CBA, Westpac, and NAB shares today.

The broker gives a buy rating to ANZ and Macquarie shares.

The post Morgan Stanley tips 5% earnings downgrades for ASX 200 bank shares. Here's why appeared first on The Motley Fool Australia.

As we can see on the chart below, the ANZ share price has decreased in the last few months. It can be a good idea to look at names like ANZ when they go through a decline.

Let's see what the latest forecasts are for the ANZ share price and what this could mean for shareholders.

Price target

A price target is where analysts think the share price will be in within 12 months of the investment call. Sometimes the price target suggests there will be a decline and other times it suggests there could be an impressive rise.

According to CMC Invest, there have been 10 recent ratings on the ASX bank share. Of those ten, four were buys, five were holds and one was a sell.

The average price target from these 10 analysts was $35.60. That's very close to what it's actually trading at, meaning investors shouldn't look forward to any strong gains.

The most optimistic price target is $40, implying a possible rise of 12% from where it is at the time of writing.

However, the lowest price target is $30.72, which implies a possible decline of 13%.

So, the valuation looks finely balanced at the moment.

What's driving the ANZ share price?

You'd have to ask each buyer and seller of ANZ shares why they transacted at the price they did.

But, it's clear that the market still has its eyes on the ASX bank share's recent FY26 first-half performance.

ANZ reported that, excluding significant items, operating income was flat and operating expenses declined 9%, helping profit before provisions rise 12%. Underlying cash profit increased by 14%.

As you can tell from the numbers it reported, the ASX bank share has been working hard at reducing costs by reducing duplication and simplifying the organisation. ANZ said 78% of 3,500 announced roles exited the bank by the end of April 2026.

Profit growth is a key driver of the ANZ share price, so it's good to see that profit grew by double-digits in the most recent result.

However, with how its net loans and advances only grew by 1% over the six months between September 2025 and March, it's not exactly shooting the lights out.

I can see why analysts aren't excited about the valuation at the moment, so there could be better opportunities out there.

The post How much could the ANZ share price rise in the next year? appeared first on The Motley Fool Australia.

That means ASX dividend shares may become more interesting than growth stocks if the CGT changes get through Parliament.

In a recent newsletter, private wealth and investment advisory firm, Medallion Financial Group, said:

At a high level, the changes tilt the playing field toward yield. If a larger portion of capital gains is taxed away, the after-tax return profile of growth assets; equities, start-ups, and expansionary investments becomes less compelling.

In contrast, income streams such as dividends retain their relative appeal, particularly where they are franked.

The most reliable dividend yields come from ASX 200 large-cap shares.

Large caps have a minimum market capitalisation of $10 billion. They are our biggest and most established listed companies.

They typically offer high dividend payout ratios because they are long-standing, well-established businesses with reliable profits.

At the top of the ASX 200 today is a mix of bank shares, mining shares, property shares, and others.

Let's take a look at the current trailing dividend yields of the top 10 ASX 200 shares today.

Dividend yields

Things to consider

A company's trailing dividend yield is calculated by dividing its total dividends (usually two) paid over the past 12 months by the current share price and multiplying by 100.

This means trailing dividend yields are based on the previous year's income and do not account for this year's market conditions.

For example, the impact of the global oil shock, which is raising input costs for many companies right now, is not reflected in current trailing dividend yields. Those rising costs today may reduce the dividend amounts some companies can pay over the next year.

So, use trailing dividend yields as a guide, not a guarantee, of future dividend income.

The post Thinking about dividend yields? Here's how much the top 10 ASX 200 shares pay appeared first on The Motley Fool Australia.

This is great news for investors looking for a stable fund which pays a reliable income, and offers long-term growth potential.

I've previously written about monthly-paying ASX dividend stocks such as BetaShares Dividend Harvester Active ETF (ASX: HVST), Plato Income Maximiser Ltd (ASX: PL8), and Metrics Master Income Trust (ASX: MXT). They all offer a reliable monthly income at an attractive rate.

But I think the BetaShares Australian Top 20 Equity Yield Maximiser Fund (ASX: YMAX) trumps them all.

Here's why.

How does YMAX work?

The Betashares YMAX is an ASX-listed exchange-traded fund (ETF) which targets the 20 largest Australian companies listed on the ASX.

The fund uses what's called a 'covered call' strategy. This is expected to generate an income significantly exceeding the dividend yields of the underlying share portfolio over the medium term. 

It generally offers lower volatility than a direct investment in the underlying shares. It does not aim to track an index.

What does its portfolio look like?

The ASX dividend stock invests in a portfolio that provides exposure to the largest 20 blue-chip Australian shares listed on the ASX, combined with call options written on the securities in the share portfolio.

The portfolio is passively managed. This means the weighting of each security generally mirrors the weighting of the security within the Solactive Australia 20 Index.

The share portfolio also aims to generate dividends, franking credits, and capital growth. 

At the time of writing, the fund is heavily weighted into the financial sector (47%) and the materials sector (21.4%). 

And as of the 30th of April, the top two holdings in its portfolio are Commonwealth Bank of Australia (ASX: CBA) at 17.5% of the portfolio, and BHP Group Ltd (ASX: BHP) which accounts for 16%. Westpac Banking Corp (ASX: WBC) at 8%, and National Australia Bank Ltd (ASX: NAB), which around for 7.4% of the portfolio, complete the top four.

ANZ Banking Group Holdings Ltd (ASX: ANZ), Macquarie Group Ltd (ASX: MQG), Wesfarmers Ltd (ASX: WES), Woodside Energy Group Ltd (ASX: WDS), CSL Ltd (ASX: CSL) and Telstra Group Ltd (ASX: TLS) make up the remainder of the top 10 exposures in the fund.

What ASX dividends does the stock pay its shareholders?

YMAX has paid quarterly dividends to its shareholders since April 2013. But in January this year, its payment frequency was amended to monthly.

As at 30th April 2026, the YMAX ETF has a 12-month gross distribution yield of 9%. It's 12-month distribution yield is 7.6%. The total 12-month franking level is 41.2%.

The fund most recently paid a $0.047623 per unit dividend to shareholders on Monday this week. This translates to an annual distribution return of 8.26%.

The post Here's a 9% ASX dividend stock to consider for a monthly passive income appeared first on The Motley Fool Australia.

Some softer-than-expected results, combined with proposed changes to negative gearing and capital tax concessions put pressure on major bank shares.

Here's a rundown of how each of the big four banking giants are faring today, and what brokers expect next.

Hold ANZ Group Holdings Ltd (ASX: ANZ) shares

ANZ shares are down around 1% to $35.2 at the time of writing. The shares are now down 4% so far in May, down 3% for the year-to-date, but are 23% higher than the trading price this time 12 months ago.

The banking giant posted good news earlier this month though. In early May, ANZ reported a 70% jump in its cash profit for the first half of FY26. Statutory profit was also up 62%, operating income was up 3%, and the bank's operating expenses were 22% lower.

ANZ confirmed it has now achieved 49% of its gross cost-savings target of $800 million for FY 2026.

Brokers are relatively neutral on ANZ shares. TradingView data shows that out of 16 analysts, the majority (eight) have a hold rating on the stock. Another six have a buy or strong buy rating while two have a sell or strong sell rating.

The average $35.32 target price implies a potential 0.3% upside at the time of writing.

Sell Commonwealth Bank of Australia (ASX: CBA) shares

CBA shares are trading in the red in Wednesday lunchtime trade. At the time of writing, the ASX bank shares are relatively flat, trading at $162.31 at the time of writing.

Today's slump means the shares are now down 6.5% so far in May, and are 6% lower than their trading price this time last year.

The bank posted a disappointing third-quarter capital update last week, where it reported a flat operating income and a 1% decline in its unaudited cash NPAT. Investors were spooked by the results and rushed to sell up their shares, sending the share price tumbling.

CBA shares have been considered overvalued relative to its peers for some time now, and it looks like the downturn could finally be coming to fruition. But the shares haven't reached the bottom yet.

The majority (11 out of 16) of analysts have a strong sell rating on CBA shares. Another three rate the stock as a sell and two rate it as a hold. The average $127.57 target price implies more than 20% downside ahead, at the time of writing.

Hold National Australia Bank Ltd (ASX: NAB) shares

NAB shares are also in the red on Wednesday lunchtime, down around 1% to $36.76 at the time of writing. NAB has been the worst big four performer in May, down 8% already. For the year-to-date the shares are down 13% and they're just over 1% lower than this time last year.

The bank's latest half-year FY26 results were a miss versus market expectations, and investors reacted negatively. Despite posting a modest earnings growth earlier this month, including a 6.4% increase in underlying profit and a 3.1% increase in revenue, the share price sell-off accelerated. 

It looks like analyst sentiment is finally shifting for NAB shares though.

The latest data shows nine out of 16 analysts now rate the ASX bank stock as a hold. Another five have a sell or strong sell rating. This is an improvement from late-April when the majority had a sell or strong sell rating.

The average $38.40 target price now implies a potential 5% upside, at the time of writing.

Sell Westpac Banking Corp (ASX: WBC) shares

Westpac shares have also come under pressure on Wednesday. At the time of writing the share price is down 1% to $35.96 a piece. They're now down 8% for the year-to-date but are still 14% higher than 12 months ago.

The bank posted its first-half results earlier this month. Westpac's statutory net profit was 3% higher year-on-year but 5% lower compared to the second half of FY25. Its total lending and deposit growth also climbed 7% year-on-year.

The result was solid, and it caused a brief share price uptick before investors reversed and the sell-off resumed. 

Analysts are pretty pessimistic about the outlook for Westpac shares over the next year. The majority (nine out of 16) have a sell or strong sell rating on the bank shares. Another seven have a hold rating.

The average $34.04 target price implies around 5% downside at the time of writing. 

The post ANZ, Westpac, NAB and CBA shares: Analysts rate 2 a hold, and 2 a sell appeared first on The Motley Fool Australia.

The 'big four' are under pressure again on Wednesday after Morgan Stanley (NYSE: MS) warned that conditions have turned against the sector faster than expected.

Commonwealth Bank of Australia (ASX: CBA) shares are down 0.71% to $161.73 at the time of writing.

Westpac Banking Corp (ASX: WBC) is down 1% to $36.02, National Australia Bank Ltd (ASX: NAB) is 1% lower at $36.73, and ANZ Group Holdings Ltd (ASX: ANZ) is down 1% to $35.31.

The falls add to a rough month for the banks. CBA has dropped 9%, Westpac is down 9%, NAB has lost 14%, and ANZ has fallen 7%.

Morgan Stanley sees more trouble ahead

According to The Australian, Morgan Stanley analyst Richard Wiles believes operating conditions for Australia's major banks have "deteriorated rapidly".

The broker is now expecting consensus earnings per share (EPS) forecasts to fall after a soft reporting season.

Wiles pointed to several pressures landing at once. These include the three RBA interest rate rises, proposed property tax changes in the federal budget, and the global energy shock.

Morgan Stanley had previously lifted its earnings forecasts for the 'big four' by about 4% in February. It has now cut them by a similar amount, with larger downgrades aimed at NAB and Westpac.

Margins and bad debts in focus

Bank investors usually pay close attention to margins, credit quality and capital strength. On those measures, the latest reporting season gave the market a few reasons to be careful.

The Australian reported that margin trends disappointed, while the four major banks set aside about $800 million in extra provisions for potential bad loans.

Capital levels at CBA and NAB also came in below expectations.

NAB has already moved to strengthen its position, raising about $1.8 billion through its dividend reinvestment plan (DRP).

Dividend growth expectations have also cooled. Management teams at CBA, NAB and Westpac have signalled that payout ratios are likely to move back toward the middle of their target ranges.

Valuations still look stretched

Furthermore, the major banks are trading on an average 12-month forward price-to-earnings (P/E) multiple of 18.5 times.

Wiles sees more room for that multiple to fall. His order of preference is ANZ first, followed by Westpac, NAB and CBA last.

CBA remains the standout premium stock in the sector, with a market capitalisation of about $270.65 billion. But its share price is now down 6% over the past year.

ANZ has held up better over 12 months, rising 22%, but it is still down 3% in 2026.

Foolish takeaway

The big four banks are still some of the most profitable businesses on the ASX. But after a strong run, investors are starting to question whether their share prices still leave much room for disappointment.

Lower margins, rising bad debt risks and slower dividend growth aren't a great mix.

Morgan Stanley's warning suggests the sector may need more than steady earnings to keep investors happy.

The post Are CBA, Westpac, NAB and ANZ shares heading for more pain? appeared first on The Motley Fool Australia.

Collectively, they make up over 20% of Australia's benchmark index, the S&P/ASX 200 Index (ASX: XJO). 

That means the performance of the big four banks largely influences many investors' the portfolios.

Let's see how they are performing so far in 2026. 

2026 at a glance

As we approach the halfway mark of the calendar year, all four banks are in the red since January. 

• Commonwealth Bank Of Australia (ASX: CBA) shares are down just 0.2%
• ANZ Group Holdings Ltd (ASX: ANZ) shares have fallen nearly 4%
• Westpac Banking Corporation (ASX: WBC) shares have dropped 8%
• National Australia Bank Ltd (ASX: NAB) shares are 14% lower than the start of the year. 

Investors have been rotating out of ASX bank stocks for a few reasons, with valuations being hit hard. 

This was clear last week when CBA shares dropped 9% in a single day.

Among many headwinds, ASX bank shares are down in 2026 because investors expect slower profits after Australian housing tax changes, reduced confidence in mortgage and property-market growth. 

Banks are also increasing provisions for bad debts as households face higher financial stress and loan arrears rise. The selloff has been amplified because bank valuations were already considered expensive, making investors quick to react to weaker outlooks.

What are brokers saying?

With recent share price weakness, investors may be thinking these blue-chips are now trading at a relative discount. 

However recent analysis from experts indicates there could be more pain in the short term. 

For Australia's largest bank, brokers have price targets set between $90 per share and $130 per share on CBA. 

This indicates a further drop of between 18% and 44%. 

It's a similar outlook for Westpac shares. 

After the company released half-year results, the team at Ord Minnett placed an updated price target of $31.00 on the ASX bank stock. 

This implies a downside potential of 13%. 

Turning attention to NAB shares, there is mixed sentiment amongst brokers. 

Fair price estimates range from $26 to $48 per share. 

With the current share price sitting at around $36, this indicates a wide range of outcomes over the next 12 months. 

Finally, ANZ appears to be the ASX bank stock receiving the most broker optimism.

Citi recently renewed its buy rating on ANZ shares on Tuesday along with a 12-month price target of $40.

This indicates an upside potential of 14% from current levels. 

The post Which big four ASX bank stock is the best buy right now? appeared first on The Motley Fool Australia.

Under the changes announced in the Federal Budget on Tuesday, the 50% CGT discount for assets held longer than 12 months will be replaced by a cost base indexation method from 1 July next year.

This method adjusts the cost base of an asset for inflation.

Existing investments will be grandfathered, so the 50% CGT discount will continue to apply to gains before 1 July 2027.

Capital gains on existing investments on or after 1 July 2027 will be subject to cost base indexation.

A minimum 30% tax on net capital gains will apply under the cost base indexation method.

There is one exception.

To maintain incentives for new housing supply, investors in new residential properties will be able to choose either the 50% CGT discount, or cost base indexation and the minimum 30% tax rate.

In a newsletter this week, Medallion outlined its predictions as to how the tax changes might influence investor behaviour.

The advisory firm said:

By increasing the effective tax burden on capital gains, the government has altered the relative attractiveness of growth versus income subtly, but meaningfully shifting investor behaviour.

At a high level, the changes tilt the playing field toward yield. If a larger portion of capital gains is taxed away, the after-tax return profile of growth assets; equities, start-ups, and expansionary investments becomes less compelling.

In contrast, income streams such as dividends retain their relative appeal, particularly where they are franked.

ASX dividends shares and franking

Dividends are typically funded from profits, and franking credits represent the tax a company has already paid on its profits in Australia.

People invested in ASX dividend shares receive both the raw dividend plus the level of franking relevant for each company they own.

The level of franking depends on how much corporate tax the company has paid and has available in its franking account.

At tax time, franking is credited towards an investors' tax payable, reducing tax on their dividend income and preventing double taxation of profits.

For example, Commonwealth Bank of Australia (ASX: CBA) is among the most popular ASX dividend shares on the market.

CBA shares typically pay dividends with 100% franking.

For 1H FY26, CBA declared a dividend of $2.35 per share plus 100% franking.

Therefore, an investor who owned 100 shares in CBA would have received a $235 dividend and a $100.71 franking credit.

'A likely rotation in capital'

Medallion says the tax changes will likely encourage a rotation in capital away from growth assets to income assets.

Investors may increasingly favour high-dividend, lower-volatility sectors over innovative, higher-risk areas of the market.

In effect, policy is nudging capital away from forward-looking, productivity-enhancing investments and toward more defensive, domestically oriented exposures.

One of the reasons ASX shares are a popular investment is because the dividend yield is much higher than international shares.

The long-term average annual yield for ASX 200 shares is 4% to 4.5%, however, this has fallen closer to 3.5% in recent years.

By comparison, the current trailing dividend yield on US shares or S&P 500 Index (SP: .INX) stocks is 1.1%.

A high dividend yield provides protection for investors when the market falls, as it has in 2026.

In the calendar year to date, the S&P/ASX 200 Index (ASX: XJO) is down 1.1%, however, investors have still received dividends.

Other popular dividend shares

ASX 200 bank and mining stocks have long been viewed as among the most generous ASX dividend shares.

For example, ANZ Group Holdings Ltd (ASX: ANZ) shares are currently trading on a trailing dividend yield 4.76%.

Westpac Banking Corp (ASX: WBC) shares are trading on a trailing yield of 4.31%.

Fortescue Ltd (ASX: FMG) shares have a trailing dividend yield of 5.3%.

Outside of the banks and miners, other strong ASX dividend shares include the energy giants, telcos, and utilities shares.

Woodside Energy Group Ltd (ASX: WDS) shares are trading on a trailing dividend yield of 5.39%.

Telstra Group Ltd (ASX: TLS) shares have a trailing yield of 3.75%.

ASX 200 utilities stock, APA Group Ltd (ASX: APA), has a trailing dividend yield of 5.39%.

The post CGT tax changes may encourage investors into ASX dividend shares: Expert appeared first on The Motley Fool Australia.

But it's very easy to make the wrong decisions. 

Even small mistakes can end up costing you a fortune, and a lot of regret, down the line. 

And some of them could compound over time too.

Here are three superannuation decisions which you'll regret making when you reach retirement.

1. Leaving your super in the wrong investment option or an underperforming fund

Default superannuation investment options are generally designed to benefit a range of investors, from those starting their first job to those nearing retirement. 

But the problem is that what is considered an appropriate risk for one person doesn't apply to the next. And, by putting (or leaving) your money into the wrong type of fund, it can quickly chip away at your balance. 

By being too conservative too early you'll lose out on the potential for more growth. Younger Australians, with time to ride out any market fluctuations would benefit from growth assets, such as good momentum stocks like Droneshield Ltd (ASX: DRO) or Electro Optic Systems Holdings Ltd (ASX: EOS).

But for those closer to retirement, it makes sense to be more conservative. This pool of Australians  might be more suited to stable assets that can weather a share market crash. Dividend-paying shares, such as ANZ Group (ASX: ANZ) and Wesfarmers Ltd (ASX: WES), are also a great option for retirees who want to benefit from additional passive income.

Even worse than the wrong investment option, is leaving your superannuation in an underperforming fund.

The difference between an average superannuation fund and a top-performing one can be the difference between scraping by in retirement and living comfortably.

2. Not taking advantage of concessional contributions before retirement

Relying only on employer contributions is unlikely to be enough for a comfortable retirement. 

Even a small additional contribution can make a big difference when it comes to retirement. 

After all, the power of compounding returns means that the more money you can invest when you're younger, the more impact it will have on your final balance.

Failing to take advantage of concessional contributions before retirement could cost you dearly when the time comes and you don't have enough money to live off comfortably. 

Take advantage of additional concessional or non-concessional contributions, whether this is salary sacrificing or after-tax payments (within your annual limits) while you can.

If you don't have the funds to add more money yourself, you can also look into government initiatives. There's the downsizer contributions rule, the bring-forward rule, the government co-contribution rule, and many others. 

These can help boost your balance just a little bit further while you still can.

3. Withdrawing too much superannuation, or too early

Many retirees treat their super balance like a large savings account once they reach preservation age. They withdraw too much cash or too early because they want immediate income.

Whether the funds are used for renovations, a holiday, to help family or to more entirely to cash after retirement, drawing far more than the minimum requirement can leave you short further down the road. 

Accessing your superannuation too aggressively, or even relying too heavily on the Age Pension without preserving investment growth, means you could easily outlive your savings. 

Inflation can quietly make the situation worse too as retirees sometimes find that their remaining superannuation is no longer enough to fund their retirement.

Ideally you want to draw up a plan of how many retirement years you expect to have, and how much you expect to spend during that timeframe. Then withdraw money from your superannuation only when you need it and let the rest continue to grow. 

The post 3 superannuation decisions you'll regret in retirement appeared first on The Motley Fool Australia.

Within the 11 market sectors, consumer discretionary shares rose the most, up 2.9% yesterday.

Materials shares also had a strong day after BHP Group Ltd (ASX: BHP) set a new record and resumed the top spot on the ASX 200.

ASX 200 materials shares rose 2%, and BHP shares finished 2.9% higher at $61.52 after resetting their historical high at $62.30.

The financial sector was the laggard, dropping 4%, largely due to Commonwealth Bank of Australia (ASX: CBA) shares diving 10.4%.

Amid this volatility, brokers have indicated continuing confidence in several ASX 200 shares this week.

Let's take a look at which stocks have attracted reiterated buy ratings.

Insurance Australia Group Ltd (ASX: IAG)

The IAG share price closed at $7.60, up 1.9% on Wednesday.

Over the past month, this ASX 200 insurance share has risen 4.8%.

UBS renewed its buy rating on IAG shares on Wednesday.

The broker raised its 12-month price target from $8.55 to $8.80.

The target suggests a possible 16% capital gain ahead. 

National Australia Bank Ltd (ASX: NAB)

The NAB share price finished at $36.86, down 1.5% yesterday.

Over the past month, this ASX 200 bank share has fallen 18%.

UBS renewed its buy rating on NAB shares with a $48.50 target this week.

This implies 31% potential growth ahead. 

CSL Ltd (ASX: CSL)

The CSL share price closed at $98.79, up 0.2% on Wednesday.

This ASX 200 healthcare giant has fallen 28% in a month and 59% over 12 months.

Morgans renewed its buy rating on CSL shares this week.

However, the broker slashed its price target from $241.34 to $147.59.

This still suggests very healthy upside of 49% over the next year.

ANZ Group Holdings Ltd (ASX: ANZ)

The ANZ share price closed the session yesterday at $34.57, down 1.6%.

Over the past month, this ASX 200 bank share has fallen 11%.

Citi renewed its buy rating on ANZ shares on Tuesday.

The broker trimmed its 12-month price target from $40.30 to $40.

The target suggests a possible 16% capital gain ahead. 

Pro Medicus Ltd (ASX: PME)

The Pro Medicus share price closed at $125.50, down 0.3% on Wednesday.

This ASX 200 healthcare share has fallen 53% over the past 12 months.

The Pro Medicus share price has been in correction mode after hitting a historical peak of $336 in July 2025.

Canaccord Genuity renewed its buy rating on Pro Medicus shares this week.

The broker lowered its target from $180.82 to $168.62, suggesting a possible 34% upside ahead. 

Aristocrat Leisure Ltd (ASX: ALL)

The Aristocrat share price closed the session yesterday at $51.94, up 13.3%.

This ASX 200 consumer discretionary share has tumbled 12.9% over six months.

Citi renewed its buy rating on Aristocrat shares with a 12-month target of $65 on Wednesday.

This implies a potential 25% upside ahead.

Temple & Webster Ltd (ASX: TPW)

The Temple & Webster share price closed at $4.98, down 6.4% on Wednesday.

The ASX 200 retail share has fallen 29% in a month and hit a 3-year low of $4.54 yesterday.

Macquarie renewed its buy rating on Temple & Webster shares with a $13.70 target this week.

This implies a potential 173% upside ahead.

Nick Scali Ltd (ASX: NCK)

The Nick Scali share price closed the session yesterday at $14.08, down 2.5%.

Over the past month, this ASX 200 furniture retailer has lost 11% of its valuation.

Macquarie renewed its buy rating on Nick Scali shares with a $21.60 target this week.

This indicates a potential 54% upside ahead.

Metcash Ltd (ASX: MTS)

The Metcash share price closed at $2.97, down 1% on Wednesday.

Over the past six months, this ASX 200 supermarket share has fallen 23%.

UBS renewed its buy rating on Metcash shares with a $3.50 target this week.

This indicates a potential 18% upside ahead.

The post 9 ASX 200 shares with renewed buy calls from the experts this week appeared first on The Motley Fool Australia.

Today's drop comes off the back of a run of share price declines. Over the past week, ANZ shares have tumbled 7%. 

The bank shares are now down 5% for the year to date, but are still 21% higher than this time 12 months ago.

Analysts are uncertain about the outlook for the shares, too. TradingView data shows that half (8 out of 16) have a hold rating on ANZ shares. Another 6 have a buy or strong buy rating, and two have a sell or strong sell rating on the stock.

The average $35.54 target price implies a small 3% potential upside over the next 12 months. However, there is a large swing between the maximum and minimum target prices.

Some think the shares could tumble another 28% to $24.96, while others think the share price could climb 20% higher to $41.50 each.

The outlook for ANZ shares might look uncertain this year, but what about the bank's passive income?

Are ANZ shares a good play for passive income?

As one of Australia's big four major banks, ANZ is generally considered to have stable earnings and predictable cash flow. 

While bank stocks are usually considered cyclical, ANZ's strong deposit base and diversified portfolio mean it is also relatively defensive in nature.

In early May, the bank reported a 70% jump in its cash profit for the first half of FY26. Statutory profit was also up 62%, operating income was up 3%, and the bank's operating expenses were 22% lower.

ANZ confirmed it has now achieved 49% of its gross cost-savings target of $800 million for FY 2026.

The bank's performance means it is able to make a reliable and regular dividend payment to shareholders every six months, payable in July and December. 

It also offers both a dividend reinvestment plan (DRP) and a bonus option plan (BOP) as alternatives to receiving cash dividends on ANZ ordinary shares.

At the same time as its latest results announcement, ANZ also confirmed an 83-cent per share dividend payment, franked at 75%, to be paid to shareholders in July. This translates to a forward dividend yield of around 4.8%.

The 83-cent dividend is the same payout that investors have been receiving every six months since July 2024. Although the latest payout will receive an additional 5% franking (previously 70%).

Passive income investors will be pleased, though. CommSec expects that ANZ will pay an annual dividend per share of $1.68 in FY26. This translates to a 4.87% dividend yield at the time of writing. The broker thinks the dividend will keep climbing too, to $1.72 per share in FY27.

That's a decent passive income. It also puts ANZ at the front of the pack with the highest dividend yield offering among the big 4 major banks. 

The post Are ANZ shares a good buy for passive income? appeared first on The Motley Fool Australia.

For decades, Australian income investors have turned to the big four banks as a reliable source of fully-franked dividends.

Commonwealth Bank of Australia (ASX: CBA), National Australia Bank Ltd (ASX: NAB), Westpac Banking Corp (ASX: WBC), and ANZ Group Holdings Ltd (ASX: ANZ) collectively pay out billions of dollars in dividends each year.

With a more supportive interest rate environment, this is unlikely to change anytime soon. 

The dividend picture today

Each of the big four currently offers a different yield proposition, giving investors a range of options depending on their priorities.

ANZ currently leads the pack on yield, offering investors a trailing dividend yield of around 4.5%, though it is worth noting that recent ANZ dividends have carried only partial franking credits. 

NAB and Westpac sit not far behind, trading on fully-franked yields of approximately 4.5% and 4.2%, respectively. 

CBA offers the lowest headline yield of around 3%, reflecting the premium valuation the market places on Australia's largest bank.

But with the strongest growth profile of all big four banks, CBA is likely to grow its dividend meaningfully through to 2027. 

All banks have roughly similar payout ratios. 

When grossed up to include the value of franking credits, the effective yield on each of these banks rises materially, making them even more attractive for Australian taxpayers in higher tax brackets.

Why the outlook remains positive

The big four banks operate in one of the most stable and concentrated banking markets in the world.

Their oligopoly position, defined by deep customer relationships and a highly regulated environment, gives them a durable competitive advantage that few industries can match. 

Rate rises from the Reserve Bank of Australia should support near-term net interest margins, further boosting bank returns. 

A more stable economic environment could also encourage stronger credit growth, which would feed directly into bank revenues.

Franking credits remain a powerful advantage

One of the most compelling reasons Australian investors hold bank shares is the franking credit benefit.

For retirees in the zero tax bracket, franking credits effectively boost the cash return well above the headline dividend yield. 

This structural advantage is unique to Australian equities and makes the big four particularly attractive relative to international income alternatives.

Foolish Takeaway

The big four banks may not deliver explosive capital growth. 

But for investors seeking reliable, tax-effective income backed by some of the most profitable and resilient businesses, Commonwealth Bank, NAB, Westpac, and ANZ continue to deserve a place in any income-focused portfolio. 

The post Why the big four banks could keep delivering for income investors appeared first on The Motley Fool Australia.