Westpac Banking Corp (ASX: WBC) shares have taken a nasty tumble over the past year, falling from $31.50 to their current price of $25.73 — a 22% decline.
What Does Westpac Do?
Servicing over 14.2 million customers in 2018, Westpac is one of Australia’s ‘Big Four’ banks and a financial-services provider headquartered in Sydney. It is one of Australia’s largest lenders to homeowners (23%), businesses (19%) and individuals via credit cards and personal loans.
Below the Westpac banner, St George, Bank of Melbourne, BankSA and RAMS are its fully-owned subsidiaries.
Westpac Dividend Yield is More Than 7%!
Based on the dividends it paid to shareholders last year, the beaten-down share price means Westpac shares currently trade with a trailing yield of 7.4%. For comparison, Commonwealth Bank of Australia (ASX: CBA) shares currently yield around 6.1%.
If we include franking credits, which serve to boost the after-tax dividend for eligible shareholders, the yearly dividend yield blows out to over 10%.
Is it time to buy?
As we highlighted last week, falling property prices and a large exposure to investor loans are reasons to be wary of owning Westpac shares.
Our leading analyst said a fair value for Westpac shares probably lies below $25 per share. Given the current Westpac share price is $25.73, investors might be better off leaving Westpac on their watchlist, for now. Remember, you don’t need to own every share on the market.
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