ASX-listed Australia and New Zealand Banking Group Limited (AU:ANZ) is a popular income stock with an attractive dividend yield of 6.02%. The stock’s yield is significantly higher than the sector average of 2.11%, making it an appealing investment choice for income investors.
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Analysts are cautiously optimistic about ANZ stock and predict some downside potential. Year-to-date, ANZ stock has gained 14.7% in trading.
ANZ ranks among the top four banks in Australia, with operations in around 30 markets.
What is the Dividend of ANZ?
In 2023, ANZ disbursed a final dividend of AU$0.94 per ordinary share on December 22, taking the total dividend to AU$1.75. The final dividend was partially franked at 56%. It consisted of an AU$0.81 dividend, partially franked at 65%, along with an additional one-off unfranked dividend of AU$0.13.
The company stated that the level of franking was lower than what some shareholders may have expected. As a result, the decision was made to offer an extra, unfranked dividend. A franked dividend is one on which the company has already paid taxes at its applicable tax rate. This tax credit attached to the dividend aims to prevent double taxation for shareholders.
Nonetheless, the total dividend in 2023 marked a 20% increase from the previous year.
Recently, the bank sold a 16.5% stake in AmBank for $443.7 million to streamline its operations. The bank intends to use the funds generated from this sale to support its capital management initiatives, potentially enhancing the prospect of future dividend increases.
What is the Price Target for ANZ?
According to TipRanks’ rating consensus, ANZ stock has received a Moderate Buy rating based on a total of 10 recommendations. The ANZ share price target is AU$27.61, which is 7% below the current price level.
