For those too young to get the reference: a 'Beagle Boy' ain't no hound. A Beagle Boy is from the dark side of Disney:
https://en.wikipedia.org/wiki/Beagle_Boys
Heartland may be getting better while the bigger banks stand still. In absolute terms though, HBL is still a lower margin business, with a lower return on equity, than the bigger banks.Quote:
I'm with Iceman on this. Just because they do things differently and don't want the overheads of an extensive branch network and certain types of low margin lending doesn't mean they won't quack loudly when it comes reporting time :)
Well this hound, in the case of ANZ, went to the trouble of working out the comparative yield, rather than assuming full imputation credits would always skew the value equation in Heartland's favour:Quote:
The other point we haven't even really touched on is who wants to own Aussie banks when you can't claim their franking credits ? Any sensible hound knows if you've got to let the taxman have two helpings of food before you get to your food bowl you won't be as well fed as you would off HBL divvies.
1/ Data from my post 432 on the ANZ thread feeding the 'fair value' at 6.5% yield calculation including NZ impuation credits, (not fully imputed for NZ sharehodlers, but NZ shareholders do get some) ignoring franking credits gives a 'business cycle fair value price' for ANZ shares on the NZX of $NZ24.67.
2/ Data from my post 8633 on this Heartland thread feeding the 'fair value' at 7.5% yield calculation, including NZ impuation credits, give a 'business cycle fair value' price for Heartland shares on the NZX of $NZ1.42.
Based on today's closing price of $1.66, Heartland is now 17% overvalued (on a whole of business cycle basis).
Based on today's closing price of $34.90, ANZ is now 41% overvalued (on a whole of business cycle basis).
At first glance, this comparison supports Roger's point about the greater value of impuation credits offering a better deal for tax resident New Zealanders, skewing the value comparison Heartland's way. But ANZ value is not driven by NZ investors. This is why I redid my data from an 'Australian perspective' (counting Australian franking credits, disregarding imputation credits) in post 443 on the ANZ thread. This gave ANZ fair value at $A31.74 or $NZ34.88 (with $NZ1- = $A0.91). By this measure ANZ is pretty much fair value right now in $NZ terms.
In my view, ANZ is still the better investment proposition for those buying at today's prices. However, because I always like to buy at 'below fair value', I wouldn't be buying either HBL or ANZ at today's prices!
SNOOPY
diacl: hold ANZ