ANZ Group Holdings Ltd (ASX: ANZ) shares are having a strong day despite the market weakness.
In late trade, the banking giant's shares are up almost 2% to $24.97.
This may have been driven by bargain hunters swooping in after bank shares underperformed the market in recent months.
And given how generous the potential dividend yields are with ANZ shares, it isn't hard to see why investors are snapping them up.
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What yields are on offer with ANZ shares?
According to a recent note out of Goldman Sachs, its analysts think that ANZ is the best big four bank share to buy right now.
This is thanks largely to the bank's institutional business, which the broker believes can continue its strong form. Goldman said:
Institutional is ANZ's largest division, representing 44%/33% of Group RWAs/revenues, and the division's 1H23 PPOP RoRWA increased to 2.2%, from a 2H16 trough of 1.2%. Our assessment of the profitability of this division concludes that these return improvements are largely sustainable.
In light of this, the broker is expecting ANZ to be in a position to pay fully franked dividends per share of $1.62 all the way through to FY 2025. Based on the current ANZ share price of $24.97, this will mean yields of approximately 6.5% for each of the next three financial years.
But the returns won't stop there according to Goldman Sachs. The note reveals that the broker has ANZ on its conviction list with a buy rating and a $27.38 price target.
This implies a potential upside of approximately 10% for investors over the next 12 months, which brings the total return on offer with its shares to ~16%. All in all, this could make the bank a top option for income investors while it trades under $25.00.
