I now own my very first shares woohoo! As I have only just started investing in the share market and learning about share investing, owning my very first shares is exciting.
Owning shares in big banks is a pretty reliable income generator, all of the big banks pay dividends to their shareholders and in many cases the dividends payout is at a higher rate than if you had savings accounts with them.
Westpac was a choice for me over the other major Banks for a couple of reasons at the time of my decision.
- Westpac was not over valued, looking at many of the other major Banks there prices appeared to be overvalued, Westpac was the one bank share that appeared about right, ofcourse lower is always nicer.
Valuation of Westpac shares from the Simply Wallstreet site - Dividend yield (I'll talk more about this in a sec)
- Westpac is in the top 25% of dividend payers in Australia (5.6%)
- Banking industry is a necessity and is not going anywhere anytime soon.
Westpac's whopping dividend
At the time of consideration Westpac pays a 6.59% or $1.88 per share dividend, now with an investment of $1500 that nets you about $100, compare that to my bank account that currently pays 1.6% pa or $24 with $1500 in savings.
It is worth considering though that Westpac currently have a payout ratio of 91%, and there has been some pressure on Westpac to cut it's dividend, however even if Westpac cuts it's dividend by 10% it will still have a decent yield.
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| Payout ratio of Westpac shares from Simply Wallstreet |
Dividend stocks play into my current investing strategy and as this is my first post on shares I plan to release a post about my current strategy soon.
Those are my thoughts on Westpac, if you have any thoughts on Westpac shares feel free to leave a comment below.
Please note that this article should not be considered as investment advice, you can read the full disclaimer at our Site Disclaimer Page.
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