On Tuesday the Westpac Banking Corp (ASX: WBC) share price finished the day almost 1% lower at $31.27.
This brought its year-to-date decline to approximately 4.5%.
Are Westpac's shares cheap enough to buy now?
I believe Westpac's shares are starting to look attractive again after their recent declines and could be classed as a buy now.
While I would prefer to buy the bank's shares in the $30 to $31 range, there is a chance that the market won't let them drop much further.
After all, its shares are priced at just 13x trailing earnings and provide a trailing fully franked 6% dividend.
This compares to Commonwealth Bank of Australia (ASX: CBA) shares which trade at 14.5x trailing earnings and yield a trailing fully franked 5.3% dividend. I would class its shares as being about fair value now.
The same could be said for Australia and New Zealand Banking Group (ASX: ANZ) as well. Its shares are priced at 14.5x earnings at present.
Based on these metrics, I think Westpac is the better of the three due to the fact that it provides investors with both value and income.
Over the next six months or so, barring any unforeseen events, I expect Westpac's shares to rerate back up to the 14.5x earnings multiple as trading conditions improve. This would put its shares in or around the $34.00 level again, approximately 9% higher than where they stand today.
All in all, I think this and its generous dividend makes Westpac worth a closer look today.
