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Since your report on WBC shares (Aug 2019), in light of the current market fall (pandemic CoVID19 virus), could you share your views re:
(1) Recommendation on Buy or wait till further fall, assuming that WBC is the only Aussie bank stock that I will have, amongst other non-bank stocks.
(2) The likely WBC dividend payments (next 3 years)?
(3) Should I consider the other three major banks instead for possible buy (ANZ, CBA or NAB) and your rankings?
(4) I have SWTZ shares. Will SWTZ be buying more WBC shares or await?
A: I prefer Westpac because, on a relative basis, it is cheap compared to ANZ and the NAB. It is Australia’s ‘number two’ bank and should trade at a premium to the ANZ and Westpac. I have to say that there is not that much between them, although CBA, due to its market leading position, better technology, management team and stronger capital position, is the clear leader. That is why it has performed the best during the down turn.
In terms of Westpac’s next dividend, it is clearly going to be cut. According to FN Arena, the market consensus for FY20 is 148.4c and 141.9c for FY21. (Last year, Westpac paid 174c, the year before 188c). This would imply that the interim dividend (to be declared in early May) will fall from 94c in FY19 to around 70 to 75c.
In regards to SWTZ, it keeps a reasonably steady exposure in the major banks – it holds shares in each of the 4 majors.
