Australia's banks are among the most closely watched shares on the ASX. Whether you're keen on steady dividends, market leaders, or just want your investments to track with the backbone of the Aussie economy, there's a good chance you're weighing up Commonwealth Bank of Australia vs Westpac Banking Corp shares.
Commonwealth Bank of Australia, or CBA, is the country's largest bank and one of Australia's brands. Operating across Australia, New Zealand, Asia, the UK, and the US, CBA's reach is global.
CBA boasts a large market cap of $254.92 billion and a P/E ratio of 23.48, ahead of its peers on size. The dividend yield sits at 3.30%, franked, which is a big draw for income-focused investors. Its earnings per share are $6.517, and shareholders received a dividend of $5.05 per share in the last year.
The franking is again 100%, ticking the box for those targeting tax-effective income. The bank has an unbroken track record of paying franked dividends stretching back decades.
Westpac Banking Corp, trading as Westpac, is Australia's oldest bank and a mainstay of the sector.
Westpac's fundamentals are competitive for value seekers. Critically, Westpac's P/E ratio is a more modest 17.22 — suggesting the market prices its future earnings more cautiously. Where it now shines is dividend yield: at 4.41%, franked, Westpac tops CBA on payout percentage.
On balance, the pick would be Commonwealth Bank of Australia.