Which ASX bank has the biggest dividend yield?
There are plenty of different ASX banks to look at in this troubled time which are trading at lower prices because of the coronavirus. The benefit of lower prices is that it boosts the potential dividend on offer.
Let's look at the current trailing (annualised) grossed-up dividend yields:
Which ASX bank offers the biggest dividend yield?
Commonwealth Bank of Australia (ASX: CBA) has a grossed-up dividend yield of 10.4%.
Westpac Banking Corp (ASX: WBC) has a grossed-up dividend yield of 15%.
National Australia Bank Ltd (ASX: NAB) has a grossed-up dividend yield of 15.1%.
Australia and New Zealand Banking Group (ASX: ANZ) has a grossed-up dividend yield of 13%.
Macquarie Group Ltd (ASX: MQG) has a grossed-up dividend yield of around 7%.
Those are some large yields. But the important part to remember is that they are trailing yields. The last 12 months of bank dividends are very unlikely to be the same as the next 12 months.
APRA has already asked banks to materially reduce their dividends and the Reserve Bank of New Zealand (RBNZ) isn't letting NZ banks (including the ASX subsidiaries) pay dividends for the time being.
I think it's more of a question of how much will the big banks cut. Westpac, NAB and ANZ are all due to report soon. If the first bank decides to pay something of a dividend then the others will probably decide to pay a heavily-reduced dividend too (as opposed to no dividend at all). Something is better than nothing for income-focused shareholders.
For total returns I think I'd want to go for Macquarie. It's the most diversified of the majors and can decide to expand anywhere in the world. Whereas the other banks are just focused on Australia (and New Zealand).
Of the big four ASX banks I think I'd go for CBA. Quality is very important in times like this and it has perhaps the best bank balance sheet on the ASX.
