Core Viewpoint - The article discusses the valuation of ANZ Banking Group shares, emphasizing the importance of using multiple valuation methods to assess whether the current share price is attractive for investors. Valuation Tools - Two primary valuation tools are suggested for assessing bank shares like ANZ: Price-Earnings Ratio (PER) and Dividend Discount Model (DDM) [2][3][7]. Price-Earnings Ratio (PER) Analysis - The PE ratio compares a company's share price to its earnings per share, with a current ANZ PE ratio of 15.2x compared to the banking sector average of 19x [4][6]. - A sector-adjusted PE valuation for ANZ, based on its earnings per share of $2.15, results in a valuation of $41.76 [6]. Dividend Discount Model (DDM) - The DDM uses expected dividends to arrive at a share valuation, with the last full-year dividend being $1.66 and an adjusted dividend of $1.69 leading to valuations of $35.10 and $35.74 respectively [9][11]. - The article suggests using a range of growth and risk rates to calculate share price, with various scenarios yielding different valuations [10][12]. Growth and Risk Rate Analysis - Different growth rates (2% to 4%) and risk rates (6% to 11%) produce a wide range of potential valuations for ANZ shares, indicating the sensitivity of the valuation to these assumptions [12]. Importance of Comprehensive Analysis - The article emphasizes the need for thorough research, including reviewing annual reports and management communication, to form a well-rounded investment thesis [13].

Core Viewpoint - Bendigo & Adelaide Bank Ltd (BEN) is currently trading at approximately $12.60, raising questions about its valuation and investment potential in the context of its financial performance and market position. Company Overview - Bendigo & Adelaide Bank, commonly known as Bendigo Bank, was established through the merger of Bendigo and Adelaide Banks in November 2007, operating primarily in the retail banking sector with over 500 community branches and agencies, mainly located along the East Coast and South Australia [2]. Financial Performance - The bank's net interest margin (NIM) is a critical measure of profitability, with Bendigo's NIM at 1.9%, surpassing the ASX major banks' average of 1.78% [6]. - Lending accounted for 87% of Bendigo's total income last year, highlighting the importance of lending activities to its revenue generation [7]. - The return on equity (ROE) for Bendigo stood at 7.9%, which is below the sector average of 9.35%, indicating room for improvement in profitability relative to shareholder equity [8]. Capital Adequacy - The common equity tier one (CET1) ratio for Bendigo was reported at 11.3%, which is lower than the sector average, suggesting potential vulnerabilities in capital adequacy [9]. Dividend Valuation - The total dividend for the last year was $0.63, with projections indicating a growth rate between 2% and 4%. Using a dividend discount model (DDM), the estimated average valuation of BEN shares is $13.32, with an adjusted valuation based on expected future dividends rising to $13.75. When considering gross dividend payments, the fair value forecast increases to $19.64 [11][12][13]. Workplace Culture - Bendigo Bank's workplace culture rating is 2.9 out of 5, which is below the sector average of 3.1, suggesting potential challenges in employee satisfaction and retention [4]. Investment Considerations - Investors are encouraged to analyze multiple years of Bendigo's annual reports and consider diverse opinions to make informed investment decisions [14].

Core Viewpoint - ANZ Banking Group's share price is under scrutiny as investors attempt to establish a valuation for the company amidst fluctuating market conditions [1][2] Valuation Methods - The PE ratio is a key metric for valuing bank shares, comparing share price to earnings per share, with a common approach being to buy shares if the PE is low and sell if it exceeds a certain threshold [3][4] - ANZ's current share price is $33.19, with an earnings per share of $2.15, resulting in a PE ratio of 15.4x, which is below the banking sector average of 19x [5] - A sector-adjusted PE valuation for ANZ, based on the average PE ratio, is calculated to be $41.81 [5] Dividend Discount Model (DDM) - The DDM is a robust valuation method for banks, using recent or forecasted dividends and a risk rate to estimate share price [6][7] - The formula for DDM is Share price = full-year dividend / (risk rate – dividend growth rate), and it is advisable to calculate with various growth and risk assumptions [8] - Using a blended growth rate and risk rate between 6% and 11%, the average valuation for ANZ shares is $35.10, which increases to $35.74 with an adjusted dividend payment of $1.69 [10] Growth and Risk Analysis - Different 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 a valuation of $24.14 [11] - The analysis emphasizes the importance of understanding net interest margins, regulatory challenges, and management culture when evaluating bank shares like ANZ [12]