Banking and financial sector form the backbone of an economy. Better the health of this sector, better the health of the economy. Factors such as the Royal Commission recommendation, monetary policy meeting by Reserve Bank of Australia, upcoming elections, inflation, etc. have a huge impact on the sector. Some of the important financial sector stocks are Pendal Group Limited, Credit Corp Group Limited and Challenger Limited. Let’s see how these stocks have performed based on their recent updates and developments.
Pendal Group Limited (ASX: PDL)
Pendal Group Limited (ASX: PDL) is involved in management services. The company recently announced Funds Under Management (FUM) for the March quarter. The group’s FUM for the quarter increased by $8.1 billion to $100.9 billion as compared to the previous quarter. Pendal Australia witnessed net inflows of plus $1.4 billion, led by lower margin cash and fixed income (+$1.7bn) in the institutional channel partially offset by the ongoing run-off of the Westpac legacy book (-$0.2bn). JOHCM experienced net outflows of minus $1.2 billion during the quarter driven by outflows in the OEICs, where European (-$0.6bn), global (-$0.3bn), UK (-$0.2bn) and Japan (-$0.2bn) funds saw redemptions. The US pooled funds took in net inflows of $0.3 billion led by the International Select and Global Income Builder strategies.
On the stock information front, at market close on 3rd May 2019, the stock of Pendal Group was trading at $8.080, up 0.498% with a market capitalisation of $2.56 billion. Its current PE multiple stands at 15.61x, and its last EPS was noted at A$0.515. Its annual dividend yield (DY) has been noted at 6.22%. Today, it touched day’s high at $8.175 and day’s low at $7.950, with a daily volume of 1,685,667. Its 52 weeks high price stands at $10.480 and 52 weeks low price at $7.370, with an average volume of 1,179,501. Its absolute return for the past one year, six months and three months are -15.19%, -1.71%, and 2.94%, respectively.
Credit Corp Group Limited (ASX: CCP)
Credit Corp Group Limited (ASX: CCP) is engaged in the debt purchase and collection as well as consumer lending. The company lately announced a Share Purchase Plan (SPP), under which CCP aims to raise up to A$10 million and is not underwritten. If demand exceeds A$10 Mn, or to raise a higher amount, Credit Corp reserves the right to scale back applications. SPP was opened on April 10, 2019 and will close on May 3, 2019. Earlier, CCP announced that the underwriting of institutional placement of A$125 Mn was successful completed where 6,112,470 new shares were issued at the offer price of $20.45 per share under the placement. In the Investor Presentation, Credit Corp highlighted that the investment levels are growing in FY19, as the decent volume has been maintained in Australia. The banking facilities have been expanded and extended with limits increased to $350 million maturing in 2022 and 2023. The projected headroom has been estimated at around $140 million at the end of year FY19.
As per the outlook for FY20, FY19 higher book starting point will produce an improved earnings outlook for FY20. The guidance for FY19 NPAT has been maintained despite writing higher volumes so far in H2.
On the stock information front, at market close on 3rd May 2019, the stock of Credit Corp was trading at $23.66, down 2.634% with a market capitalisation of $1.32 billion. Its current PE multiple stands at 17.05x and its last EPS was noted at A$1.425. Its annual dividend yield (DY) has been noted at 2.96%. Today, it touched day’s high at $24.20 and day’s low at $23.59, with a daily volume of 97,206. Its 52 weeks high price stands at $24.580 and 52 weeks low price at $14.58, with an average volume of 214,878. Its absolute returns for one year, six months and three months are 29.53%, 25.58% and 10.96%, respectively.
Challenger Limited (ASX: CGF)
Challenger Limited (ASX: CGF) is involved in two principal activities, which are APRA regulated life division and funds management division. The Life segment comprises CLC and Accurium Pty Limited. CLC is provider of annuities and guaranteed retirement income products and Accurium provides self-managed superannuation fund actuarial certificates in Australia. The funds management segment is focused on the retirement savings phase of country’s superannuation system by providing products & services seeking to deliver superior investment returns. Its strategic partnership with MS&AD Insurance Group (Insurance company in Japan) intends to help Challenger to diversify its access to the Japanese annuities market and delivers certainty by underpinning and increasing the sales of our annuities into Japan. The expanded relationship will deliver certainty by delivering a minimum 50 billion yen (or approximately A$640 million) across both Australian and US dollar products each year. MS&AD also intends to increase its share in Challenger above 15%, which I consider to be a vote of confidence in their business and their strategy.
Today, CGF has 17 boutique partnerships, managing a combined $59.3 billion in funds under management. This is up from $10 billion eight years ago, making Fidante (CGF’s business line) one of the fastest emerging fund managers in the country.
In FY19 Q2 and Q3 domestic annuity sales, major hub sales decreased by 25% on pcp, whereas IFA sales increased by 26% on pcp. CGF’s new platforms i.e. Hub24 and Netwealth will go live by Q4 FY19.
On the stock information front, at market close on 3rd May 2019, the stock of Challenger Limited was trading at $8.21, down 0.965% with a market capitalisation of $5.07 billion. Its current PE multiple stands at 37.85x and its last EPS was noted at A$0.219. Its annual dividend yield (DY) has been noted at 4.28%. Today, it touched day’s high at $8.35 and day’s low at $8.14 with a daily volume of 3,056,151. Its 52 weeks high stands at $13.450 and 52 weeks low at $7.170, with an average volume of 3,023,931. Its absolute return for the past one year, six months and three months are -27.47%, -21.05%, and 11.28%, respectively.
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