Are ANZ shares worth considering in November?

Core Insights - ANZ Banking Group's share price is under scrutiny as ASX investors attempt to establish a rough valuation for the company [1][2] - The Australian banking sector constitutes approximately 30% of the share market by market capitalization, highlighting its significance [2] Valuation Methods - The Price-to-Earnings (PE) ratio is a common method for valuing bank shares, comparing the share price to earnings per share [3][4] - ANZ's current share price is $36.8, with earnings per share of $2.15, resulting in a PE ratio of 17.1x, which is below the banking sector average of 20x [5] - A sector-adjusted PE valuation for ANZ, based on the average PE ratio, is calculated to be $42.73 [5] Dividend Valuation - The Dividend Discount Model (DDM) is a robust method for valuing banking companies, relying on recent or forecasted dividends [6][7] - The formula for DDM is Share price = full-year dividend / (risk rate – dividend growth rate), with last year's dividend of $1.66 assumed to grow consistently [8] - Using a blended growth and risk rate, the valuation of ANZ shares is estimated at $35.10, increasing to $35.74 with an adjusted dividend payment of $1.69 [10] Growth and Risk Analysis - Various growth and risk rate scenarios yield a range of valuations, with a 6% risk rate and 2% growth rate suggesting a valuation of $42.25, while an 11% risk rate and 4% growth rate suggest $24.14 [11] - The analysis emphasizes the importance of understanding net interest margins and regulatory challenges when assessing the bank's performance [12] Management and Culture - Evaluating the management team and company culture is crucial for long-term investment decisions, with ANZ's culture not rated as perfect but still a significant factor in analysis [12]