Westpac and NAB shares outperform ASX 200 over three years

Major Australian banks, specifically Westpac Banking Corp and National Australia Bank (NAB), have demonstrated strong performance over the last three years, outperforming the S&P/ASX 200 Index.

An analysis of a $10,000 investment made three years ago shows that Westpac shares grew significantly. Including reinvested dividends, a $10,000 investment in Westpac would have grown to an accumulated value of approximately $18,360. Similarly, a $10,000 investment in NAB would have grown to approximately $15,108 when accounting for fully-franked dividend payments.

Australian investors frequently favor these large financial institutions due to their oligopolistic market position and the availability of franking credits for dividend seekers. Valuation of these stocks often involves analyzing price-earnings (PE) ratios, which compare share prices to recent full-year earnings per share.