Since the start of last month the Westpac Banking Corp (ASX: WBC) share price has shed 15% of its value.
This has left its shares trading close to their lowest level in 2017 and yielding a trailing fully franked 6.3% dividend.
Does this make Westpac's shares a buy?
I think it does. So much so I recently bought shares in Australia's oldest bank myself.
Numerous times over the last few months I wrote about how I felt Westpac's shares were overvalued and in danger of a decline.
Now that this decline has materialised and its shares are changing hands at a lowly 13x trailing earnings, I feel it is at long last good value again.
Whilst I do believe there is a chance that the bank will be forced to cut its dividend slightly because of the bank levy, even after accounting for a potential cut, its shares are still likely to provide a dividend yield in excess of 6% at the current share price.
This is not only a market-beating yield and superior to rival Australia and New Zealand Banking Group (ASX: ANZ), but also significantly better than anything you'll receive from term deposits or high interest savings accounts.
In light of this, I feel Westpac could be a great option for income investors today.
But an investment isn't without risk of course. A potential rise in bad debts and a housing market crash would almost certainly weigh heavily on its shares.
But at present I feel confident that neither of these risks are about to eventuate, hence why I am happy to have the bank in my portfolio today.
