After dropping as low as $29.55 in early June, the Westpac Banking Corp (ASX: WBC) share price has gone on an impressive run and reached as high as $32.74 last week.
By comparison, the benchmark S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has been flat during the same period.
Is it too late to buy Westpac shares?
Whilst it is no longer the bargain buy it was in June, I still believe Westpac's shares are reasonable value right now.
Especially for income investors that are in search of dividends following the decision by Telstra Corporation Ltd (ASX: TLS) to slash its dividend to 22 cents per share in FY 2018.
At the current share price Westpac provides investors with a trailing fully franked 5.8% dividend.
Whilst this is only slightly bigger than the yield on offer from my next favourite in the industry Commonwealth Bank of Australia (ASX: CBA), I believe its shares are far better value for money.
At present Westpac's shares are changing hands at 1.7x book value compared to CommBank's shares which are priced at approximately 2.3x book value.
There are risks.
Whilst I feel reasonably confident that there won't be a housing market crash, should one occur then the performance and the shares of all the big banks would certainly come under significant pressure.
Furthermore, as rates rise there is a danger that bad debts could rise as well. This could also put a bit of stress on the banks' bottom lines and ultimately their dividends.
But for now, though, I remain optimistic that it is full steam ahead for Westpac and suggest investors consider snapping up shares this week.
