June 2019


Stock I'm watching this month:-

WBC - Westpac Banking Corporation

Sector: Financials
Market Cap:  95.93 Billion
Price/Earnings: 13.95
Price/Book: 1.5
Return On Equity: 11.18%
Return On Assets: 0.8%
Debt/Equity: N/A

Reasons to watch: Westpac is one of the big four banks in Australia. It is currently paying a dividend of about 6.74% (9.63% if franking is included). If you have some cash sitting in a savings account, paying interest of 1.5%, you might as well own their stocks and get a higher dividend. Sure there is risk of the share price falling, but as long as the bank continues to generate income and pay them out as dividend, the share price really doesn't matter.

Risk: There are a lot of banks in Australia for such a small population, and WBC could easily lose market share. On top of that, neo-banks are starting to be established in Australia. Fintech are also a threat to traditional banks. The housing sector in Australia has been in decline since mid 2017 and might still continue to decline.

Sentiment: Buy
Disclosure: Held
Current Price: $29
My Strike Price: $29 (Discounted Cash Flow Intrinsic Value: $29.31)




Disclaimer: This does not constitute any financial advice or stock recommendations. As always, Do Your Own Research.

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