7 Mid-cap Stocks for retirement – MFG, SKI, CGF, BAP, QAN, BLD, AOG

Mid cap stocks

MAGELLAN FINANCIAL GROUP (ASX: MFG)

In the month of August, Magellan Financial Group (ASX: MFG) witnessed a net inflow of $292 million which includes net retail inflow of $74 million and net institutional inflow of $218 million. In FY2018, company earned revenue of $452.6 million which was 34% higher than the previous $338.3 million in FY2017. Profit after tax after MGG net offer costs and amortization increased by 8% to $211.8 million in FY2018 compared to last year. Diluted EPS of the company increase by 7% to 122 cents in FY2018. This year company acquired Airlie Fund management and frontier group. In the last six months, the share price of the company increased by 16% to $27.4 as on 28 September 2018. The stock is trading at higher levels but has a significant dividend yield of around 4.86%.

SPARK INFRASTRUCTURE GROUP (ASX: SKI)

SPARK INFRASTRUCTURE GROUP (ASX: SKI) delivered 6.9% operating cash flow growth to $130 million in the first half of FY2018. The company’s revenue grew by 5.7% to $563.5 million in HY2018. EBITDA of the company grew by 7.6% to $420.2 million. The company forecasted DPS growth of 4.9% to 16.0 cps in FY2018. Despite the continued uncertainty of energy policies, the performance fundamentals and outlook for new energy future remain solid for the company. In the last six months, the share price of the company decreased by 6.3% as on 28 September 2018; while it has a dividend yield of about 7%.

CHALLENGER LIMITED (ASX: CGF)

CHALLENGER LIMITED (ASX: CGF) earned a revenue of $2,190.5 million in FY2018 which was $1,972.3 million in the previous year however due to the increased expenses and finance costs the profit of the company decreased from $398.2 million to $323.8 million which has resulted the basic and diluted earning per share to decline from 70.7 cents in FY 2017 to 54.0 cents in FY2018. In the past six months, the company’s share price decreased by about 3% while it has a dividend yield of about 3.17%. The group is seemingly benefitting from rise in number and size of annuities in view of retirement driven objectives.

BAPCOR LIMITED (ASX: BAP)

BAPCOR LIMITED’s (ASX: BAP) share price increased by 34.2% in the past six months as on 28 September 2018. This exceptional growth in the share price is the result of the great financial performance of the company in the FY 2018. In the FY2018, the company’s revenue grew by 22% to $1,237 million compared to last year. The NPAT of the company grew by 32% to $86.5 million in FY2018. The EPS of the company increased by 27% to 30.99cps. The company made two acquisitions (Tricor equipment and AADi) in FY 2018 which have contributed in the growth of the company.  While the dividend yield of the group is around 2% at the moment, but the growth potential is expected to continue for sustainability and future increase in returns.

QANTAS AIRWAYS LIMITED (ASX: QAN)

Despite witnessing a record profit in FY 2018, in the past three months QANTAS AIRWAYS LIMITED’S (ASX: QAN) share price just moved up by 1% as on 28 September 2018. The total revenue of the company grew from $16,057 million in FY 2017 to $17,060 million to FY2018. The underlying profit after tax increased from $1,181 million in FY 2017 to $1,391 million in FY 2018. The company increased its net capital expenditure from $1,534 million in FY 2017 to $1,971 million to FY 2018. The cash flow from the operations grew from $2,704 million in FY2017 to $3,413 million in FY 2018. The company’s financial framework demonstrates continued discipline towards net debt, capital expenditure and return on investment.

BORAL LIMITED (ASX: BLD)

In the past six months, the share price of Boral Limited (ASX: BLD) decreased by 7.25% as on 28 September 2018. For the year ended 30 June 2018, the company reported sales revenue from continuing operations of $5,731.1 million compared to $4,128.0 million a year ago. Profit before net interest expense and income tax was $571.3 million compared to $345.4 million a year ago. Profit before income tax was $467.5 million which was $294.7 million a year ago. Profit from continuing operations was $430.5 million in FY 2018 which was $245.7 million a year ago. Net profit after tax of the company is $441.0 million compared to $296.9 million a year ago. Diluted earnings per share was 37.4 cents which was 29.0 cents a year ago. The company is expecting capital expenditure of around $400 million to $450 million in FY2019. With dividend yield of about 3.8%, the group is trying to manage growth from different streams including the overseas expansion moves.

AVEO GROUP (ASX: AOG)

While the group has a market capitalization more towards a small-cap stock category, its annual dividend yield of about 4.46% has been at a decent level with dividends over 2017 and 2018 being maintained well. Despite achieving strong financial result in FY 2018, in the past six months the share price of the AVEO GROUP (ASX: AOG) decreased by 23.2% as on 28 September 2018. The underlying profit after tax and non-controlling interest increased by 17% to $127.2 million which was mostly driven by the 40% profit increase from the Group’s retirement business. Due to concerns around sustainable sales levels in a broader property market the company’s security continues to trade at discount to NTA despite having better than expected financial results.


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