Monday, August 30, 2010

Long Term View: Westpac Banking Group Ltd

Chart forWestpac Banking Corp (WBC.NZ)

In this series of posts I am going to be looking at stocks listed on the NZX in relation to their returns to shareholders over the life of their listing -what shareholders would now see in their back pockets if they had invested in the company IPO. The calculation of returns includes dividends and tax credits.

Westpac Banking Group Ltd [WBC.NZX] has been a stellar investment for shareholders since its 1970 listing* on the ASX at $AU 2 per share and 1992 listing on the NZX at an adjusted $NZ 6.50. With $AU15.62c in net dividends (see NZX chart above and ASX chart here ) and numerous share splits, bonus issues, rights issues,share buybacks capital raisings and ; a 1:5 bonus issue in 1970 ,1:4 bonus issue in 1973 and 1977, a 1:4 rights issue in 1985 and 1988, a 5% share buyback and numerous capital raisings ** in 1996 gives WBC an 1970% return (see chart below for the share price percentage gain against the average of all NZX indexes - does not include dividends, tax credits and the share split in its calculation) and over the nearly 40 year listing of WBC an annual net return of 49.25 %***!.


* We will look at the full history for this Australian stock that listed in 1970 on the ASX and December 1992 for a New Zealand listing on the NZX.

**Estimated dilution of 90% for shareholders.

*** For holders of New Zealand listed shares the annual return has been just over 28 % since available data based on a 1992 share price of NZ$6.50, AU$9.48 in net dividends, 30% in tax credits and a 5% share buyback in 1996. This compares to a 7.22% return from the average of all NZX indexes.

! This compares to a 51.21% return for ANZ Bank over 41 years.



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Westpac Banking Group Ltd @ Share Investor


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The Intelligent Investor: The Definitive Book on Value Investing. A     Book of Practical Counsel (Revised Edition)
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