ANZ: Number 1 of the big 4

Growth potential, big balance sheets and great income – what more does an investor need?

Owen Raszkiewicz

Owen Raszkiewicz is a Motley Fool Contributor. Owen has been a Contributor since 2013, having also spent time as a Fool writer/analyst. He also worked as an Investment Analyst at Zenith Investment Partners, Australia's top research house specialising in managed funds. Owen has appeared on Channel 10's The Project and was invited on the BBC. He holds a Masters of Applied Finance, Masters of Financial Planning, Bachelor of Technology, Advanced Diploma of Financial Services and Diploma of Mortgage Broking Management. In addition, Owen has passed Level 1 of the Chartered Financial Analyst (CFA) Program. He has taken the Banking + Finance Oath (BFO). When he is not writing, Owen is Managing Director of Rask Finance, an Australian financial education company. You can email him: [email protected].

Published July 9, 2013 10:01 am AEST

ANZ (ASX: ANZ) is making the right decisions and giving more of everything back to shareholders — and there's still time to get on board.

Investors aren't going to find the same amount of growth in the big four as they will from smaller S&P/ASX 200 (ASX: XJO) (^AXJO) listed stocks but at the same time investors aren't as willing to devote so much of their hard-earned cash into smaller stocks. That brings us to ANZ.

Commonwealth Bank (ASX: CBA) is currently the largest Australian of the big four by market cap, followed by Westpac (ASX: WBC) and ANZ shortly after. However, as domestic revenues begin to dry up, investors are left wondering if the banks will continue to experience the same amount of growth as they have enjoyed in the past 10 years. It would be a fair assumption that banks won't have the same amount of growth in coming years since the mining industry is contracting, the Aussie dollar and interest rates are falling and the housing market sluggish.

This is where both foreign growth and acquisitions have come into play. Whilst the Commbank was busy acquiring BankWest and Westpac was developing St George, Bank of Melbourne and Bank SA, ANZ was building its overseas presence.

Since 2007, ANZ has been grooming overseas markets, particularly in Asia, to become real revenue earners for the banking heavyweight. Even though NAB (ASX: NAB) is smaller and has a presence in the UK, ANZ takes our top spot as the bank with the most earnings outside the Australia and New Zealand.

Foolish takeaway

With a 5.1% fully franked dividend and solid expansion plans, ANZ fits comfortably in investors' portfolios. Keep an eye on the next annual report in October because ANZ is likely to both increase dividends and turn its first profit from overseas businesses. Based on current prices, visionary management and a long term investing scope, it could be a healthy addition to your portfolio.

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Motley Fool contributor Owen Raszkiewicz owns shares in ANZ.

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