Are ANZ shares worth considering in October?

Core Viewpoint - ANZ Banking Group's share price is under scrutiny as investors attempt to establish a rough valuation for the company, utilizing various methods such as the PE ratio and Dividend Discount Model (DDM) [1][5][10] Valuation Methods - The PE ratio is a key metric for valuing ANZ shares, comparing the share price to earnings per share, with a current PE ratio of 16.2x against a sector average of 20x [3][5] - A sector-adjusted PE valuation for ANZ shares is calculated at $42.51 based on the average PE ratio of the banking sector [5] - The DDM is highlighted as a robust valuation method, using recent or forecasted dividends and a risk rate to estimate share price [6][7] Dividend Analysis - The DDM formula is Share price = full-year dividend / (risk rate – dividend growth rate), with last year's dividend of $1.66 assumed to grow consistently [8] - Valuations using a blended growth rate and risk rate between 6% and 11% yield an average valuation of ANZ shares at $35.10, with an adjusted dividend payment increasing the valuation to $35.74 [10][11] Market Context - Australia's major banks constitute approximately 30% of the share market by market capitalization, reflecting their popularity since the early 1990s [2] - The political implications of a bank's failure provide an implicit protection against complete financial collapse, although shareholder returns are not guaranteed [2] Additional Considerations - Investors should assess net interest margins, regulatory challenges, and management culture when analyzing ANZ Banking Group for long-term investment [12]