2 Top Performing ASX Banking Stocks Of 2021
Australian shares gained ground on Wednesday. This follows a volatile session that saw the market fall at the open. However, as the day progress, the ASX 200 rallied on news of Evergrande’s deal with bondholders.
The Australian benchmark ended the day higher, as gains in the resources, energy and mining sectors led shares higher. At the close in Sydney, the ASX 200 rose by 0.32%.
Our List of Banking Stocks Of The Week That Needs Close Monitoring.
At the moment of writing, the Australian index still remains 4.6% below its all-time high. The recent correction on the broad market could be an opportunity to consider these two big banks in your value portfolio:
ANZ Bank (ASX: ANZ)
Sure, the ANZ Group share price has struggled in the past few weeks. The pain for investors continued today, with shares in the banking giant closing -0.22% lower for the day. Although the short-term outlook might not seem bright for ANZ stocks, though, the banking giant is a sure play if you are a long-term value investor. As you know, ANZ is one of the big four and exhibits a solid balance sheet. At the current price of $27.09 per share, ANZ is about 27% below its all-time high from back in March 2015. Looking at this angle, it might be an interesting opportunity to grab some shares while it is still cheap.
Let’s look at why the ANZ share price has been struggling recently. Despite a disappointing past few weeks, ANZ has not released any price-sensitive news. As a result, many undercurrents could be putting pressure on the banking giant.
Firstly, we think of the general weakness in the broader domestic market that could explain why ANZ shares have struggled. Although, we remain optimistic for a rapid return to a normal economy post-COVID. Hence, ANZ has recently intensified its focus on retail, business, and the private banking space. Upon the improvement of the economic environment, we believe ANZ will rapidly get back on track.
Besides, ANZ has a strong capital position and cost reductions. The bank announced its intention to buy back up to $1.5 billion worth of shares on the market as part of its capital management plan.
National Australia Bank Ltd (ASX: NAB)
Another big bank you could consider for your value portfolio is NAB. Although, despite a recent blip, NAB shares have still smashed the market in 2021. Yes, year to date the banking giant shares appreciated by 19%.
However, NAB still lags behind the other banks. But we believe it could be a good time to consider adding NAB to your portfolio. Why? Well, NAB is fundamentally solid. The bank has a robust balance sheet, stable earnings along solid cash earnings growth. What we also like about NAB is the recent return to dividend growth.
Overall, we like the bank. We think that the recent overreaction from the market will fade rapidly with the share performance back on course onward FY22.