The financial sector is the lifeline of any economy, be it small or large, growing or developed. In order to remain stable and keep growing it needs to have a strong financial sector. The companies generate a good portion of revenue by way of lending which is always required in the economy, although the rate and size of lending may change from time to time. Therefore, it becomes no brainer to keep strong financial companies in the portfolio. Given below is the brief overview of 4 financial services stocks.
Macquarie Group Limited (ASX: MQG)
Macquarie Group Limited (ASX: MQG) is one of the financial company that has exponentially increased the investors’ wealth over the past few years. Surging from A$20 odd levels in September 2011 to recently made high of ~A$130. It is one of the best global financial services company which has performed better over the years despite tough market conditions. The company also updated about its financial performance and operational updates on 12th February 2019, wherein Satisfactory trading conditions were stated with significant realisations in 3Q19 across the Group, and Asset Finance originations were in line with expectations. MQG’s shares traded at $127.74 with the market capitalization of circa $43.14 Bn as on March 15, 2019. The stock is trading slightly towards 52-weeks higher level.
National Australia Bank Limited (ASX: NAB)
National Australia Bank Limited (ASX: NAB), a large-cap financial company with market capitalization of ~A$70.11 billion, can also be considered as “too big to fail”. On 6th March 2019, the bank announced the selection of the new Chairman, Philip Chronican after the resignation of Ken Henry amid a public inquiry regarding misconduct in the financial sector. This shows the highest level of ethical practices and measures being used by the management which is important considering the size of the bank relative to the economy. Qualitative business with equally good management is one of the best combinations for any form of business. MQG’s shares traded at $25.21 with the reasonable PE multiple of 12.45x as on March 15, 2019.
Suncorp Group Limited (ASX: SUN)
Suncorp Group Limited (ASX: SUN) is a relatively volatile stock, making it slightly difficult for investors to stay invested in the company. The company came out with its 1HFY19 results on 14th February 2019. Its half-year result reflects a decent growth of 3.2% in top-line despite there was a moderating banking environment. It also recorded a net profit after tax (NPAT) of $133 million from continuing operations for 1HFY19 compared to the previously reported number of $222 million in 1HFY18. It was majorly impacted by the natural hazard claims costs and some negative impact of investment market movements during the same period. The net asset decreased to $13,624 million at 31 December 2018 from $13,973 million at 30 June 2018, primarily due to the payment of the 2018 final and interim dividend, partially offset by the total comprehensive income for the half-year. SUN’s shares traded at $13.52 with the market capitalization of circa $17.62 Bn as on March 15, 2019.
QBE Insurance Group Limited (ASX: QBE)
QBE Insurance Group Limited (ASX: QBE) is an Australia-based insurance company with the market capitalization of circa$16.49 Bn as of March 15, 2019. The objective of the company is to help the customers and protect themselves from risk with the focus on sustainability and understanding the needs of its customers and ensuring the sustainability of the business. The company came out with its 1HFY19 results on 25th February 2019. It was able to generate cash ROE of 8% with the previously reported number of negative 1.4%. Total GWP also rose from $13.32 billion to $13.65 billion in 1HFY19. The stock has risen sharply from A$9.5 odd levels to ~A$12.5 levels in a couple of months. Technically, the stock getting support from lower levels. QBE’s shares traded at $12.51 with the PE multiple of 30.25x as on March 15, 2019. The stock is trading slightly towards 52-weeks higher level.
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