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For investors who have been holding ANZ (ASX:ANZ) shares over the past 18 years, the journey has been marked by relative stagnation. Priced at just over $24 a share today, ANZ trades at a level comparable to that of 2006. Despite highs and lows, including the global financial crisis in 2009 and an all-time high in mid-2015, the stock has remained in a multi-year rut, prompting questions about its future trajectory. This situation raises broader considerations about the performance of ASX financial stocks over an extended period.
ANZ's Historical Performance
ANZ has weathered various market conditions, experiencing highs above $36 and lows under $13 during the global financial crisis. However, investors holding the stock for nearly two decades have primarily relied on ASX ANZ's dividend for returns.
Challenges Faced by ANZ
ANZ's journey through the years has been marred by challenges, including struggles in its mortgage offerings and difficulties penetrating the business banking market dominated by competitors like NAB. The stock's relatively low earnings multiple compared to its Big Four peers contributes to its stagnant performance.
A Glimpse of Hope in FY23
Despite the prolonged rut, ANZ's FY23 results showed promise. The bank reported a 14% increase in cash from continuing operations and a 10% hike in its annual dividend to $1.75 per share. These positive financial indicators hint at a potential shift in ANZ's trajectory.
Breaking Free from the Rut in 2024?
The critical question remains: Can ANZ break free from its multi-year rut in 2024? The answer hinges on the bank's ability to address past challenges and demonstrate sustained positive performance. ANZ's FY23 results suggest a step in the right direction, but investors will be closely monitoring the bank's progress.
Income Potential and Dividend Outlook
ANZ's relatively low P/E ratio of 10.72 compared to its peers may present an opportunity for investors. The bank's ability to increase dividends, as evidenced by the FY23 dividend hike, could attract income-focused investors. ANZ's current trailing yield of 7.23% positions it as an appealing income stock, and further dividend increases could enhance its attractiveness.
The Path Ahead
The factors to watch in 2024 include ANZ's ability to continue improving its financial metrics, address challenges in its mortgage offerings, and make strides in the business banking market. Another hefty dividend pay rise could capture investor attention, especially those seeking income from ASX bank stocks.
In conclusion, while ANZ has faced challenges and a prolonged period of relative stagnation, the recent positive financial indicators provide a glimmer of hope. The path ahead will be defined by the bank's strategic moves, financial performance, and its appeal to income-focused investors.
