What’s Up With These Financial Stocks – NGI, AFG, SZL, ZIP, JHG

  • Oct 19, 2019 AEDT
  • Team Kalkine
What’s Up With These Financial Stocks – NGI, AFG, SZL, ZIP, JHG

Financial sector is a section of economy which provides financial services to customers like custody of money, managing money, providing credit and enabling of financial transactions. This sector comprises of commercial banks, insurance companies, non-banking financial companies, co-operatives, pension funds, mutual funds and other smaller financial entities. Financial sector is one of the biggest contributors to a country’s GDP.

Let us now have a look at a few Financial stocks.

Navigator Global Investments Limited (ASX: NGI)

Navigator Global Investments Limited (ASX: NGI) provides investment management services to investors through its wholly owned subsidiary Lighthouse Investment Partners, LLC.

September 2019 AUM Update: The company’s estimated total AUM for the quarter ended 30 September 2019 went down to USD 13.53 billion from USD 14.19 billion as on 30th June 2019.

AUM Update (Snapshot Source: Company’s Report)

Dividend: Navigator Global Investments Limited will pay a final dividend for FY 2019 of US 9.0 cents per share on Friday, 30 August 2019. With an exchange rate of 0.6783 American Dollars per Australian Dollar, Dividend per ordinary share to be paid in Australian dollars is 13.2685 cents. The company has a dividend distribution policy of 70% to 80% of the earnings before interest, tax, depreciation and amortisation and impairment losses (EBITDA)

Dividend Distribution (Source: Company’s Presentation)

Significant rise in Revenue: During the year ended 30 June 2019, the revenue of the company went up by 28% from US$89.57 million to US$ 114.867 million. This was mainly driven by 40% increase in revenue from management fees, 35% increase from reimbursement of fund operating expenses, 12% increase from Revenue from provision of office space and services which was however partially offset by 85% decline in revenue from performance fees. The company’s basic EPS steadily went up to US16.55 cents per share from the loss of US 8.05 cents per share in FY18.

Outlook: The company will continue to find ways to enhance its processes, systems and products so that it can differentiate itself from the competitors. The company’s focus is to improve the efficiency by which the portfolios seek their objectives by proactively finding the best mix of talent globally; improving access to research, data, and analysis; and reducing overall costs.

Stock Performance: The stock closed at A$2.640 on 18 October 2019, down by 22.19% in the past 3 months. On the valuation front, the stock is trading with the P/E multiple of 11.440X while having an annualised dividend yield of 9.05%.

Australian Finance Group Limited (ASX: AFG)

Australian Finance Group Limited (ASX: AFG) is engaged in the business of mortgage origination and management of home loans and commercial loans and distribution of self- branded home loan products funded via traditional mortgage management products.

Dividend: The company declared an ordinary fully paid dividend of 5.9 cents per share which was paid on 3 October 2019, bringing the total dividend to be 10.6 cents per share for FY 19.

Financial Performance for the year ended 30 June 2019

  • During FY 2019, AFG reported an annual underlying net profit after tax of $28.56 million up by 1.8% as compared to the previous year.
  • Total revenue also went up by 7% to $660 million which was driven by growth in AFG Securities and longer loan lives.
  • Net cash flows from operating activities declined from FY18 and stood at $27.8 million in FY19 as the previous year included a positive impact of working capital movement driven by timing of commission payments.
  • The company maintains a strong debt free balance sheet providing a platform for future investment in organic or inorganic growth opportunities.

Outlook: The company remains confident about the residential lending market and the important role brokers play in the home lending market. AFG’s customer first approach and responsive operating model presents many opportunities for the business.

Stock Performance: The stock closed at $2.310 on 18 October 2019. The stock went by 98.31% in the past 6 months and delivers an annual dividend yield of 4.51%.

Sezzle Inc. (ASX: SZL)

Sezzle Inc. (ASX: SZL) is into the operation of a payment platform which charges the merchants a processing fee rather than charging consumers interest as traditional providers do.

Issue of Employee Options and RSA's: Sezzle Inc. issued 2,385,000 Unlisted Options for an exercisable price of A$2.30 and 457,000 Restricted Stock Awards with vesting date 12 months from issue date.

Sezzle extends reach through Visa's CyberSource Platform: The company announced that its solution is newly available to online businesses worldwide through Visa’s CyberSource payment management platform enabling merchants to offer the company’s zero-interest ‘buy now, pay later’ solution. An alternative payment solution of the company enables shoppers to split ecommerce purchases into four interest free instalments over the period of six weeks.

Business Highlights

  • The active customers of the company took a major hit and increased from 269,820 to 429,898 at the end of the quarter ended 30 June 2019 compared to end of the prior quarter, reflecting an increase of 59.3% while active merchants increased by 52% from 3,321 to 5,048 during the same period.
  • End-customer approval rates were 83.2% for the six months ended 30 June 2019 compared to 72.9% for the previous corresponding period.

Significant rise in performance: The underlying merchant sales took a jump from USD 4,524,000 in H1 FY 2018 to USD 70,233,000 in H1 FY2019. During the six months ended 30 June 2019, net transaction loss came down to 15% from 21% in the prior corresponding period, which was driven by improvements in fraud detection tools, base limit strategies and credit line management as well as increased repeat usage.

Stock Performance: The stock closed at A$2.370 on 18 October 2019. The stock produced a return of 10.95% in the last 1 month.

ZipTel Limited (ASX: ZIP)

ZipTel Limited (ASX: ZIP) is a telecommunication company offering customers with a discounted mobile phone roaming service for overseas travel.

ZipTel signs Software Development Collaboration Agreement: The company has entered into a collaboration agreement with Lateral Pty Ltd, Perth based software development company, to deliver bespoke software development solutions for third parties.

  • Financial Performance for the year ended 30 June 2019
  • During the year, the loss after tax of the Group for the financial year attributable to the members of ZipTel Limited was $338,415 in FY19 as compared to the loss of $282,282 in FY 18.
  • Revenue for the period ending 30 June 2019 went down from $26,154 in FY18 to $7,341 in FY19 leading in the rise in loss per share from $0.19 in FY 18 to $0.22 in FY19.
Financial Performance (Source: Company’s Report)

Stock Performance: The stock of the company closed at $0.015 on 18 October 2019. The market cap of the stock is $2.41 million, and the stock has returned 8.33% in the past three months.

Janus Henderson Group PLC. (ASX: JHG)

Janus Henderson Group PLC. (ASX: JHG) offers actively managed solutions to meet diverse investment goals and delivers exceptional client services.

Update of Securities: Janus Henderson Group Plc. provided an update to the number of CDIs quoted on the ASX which reflected net transfers of 803,493 CHESS Depositary Interests from the CDI register during the month of September 2019.

Dividend Distribution – JHG: The Company declared a dividend of USD 0.36 per security on CHESS Depositary Interests which was paid on August 28, 2019.

Financial Performance for the second quarter ended 30 June 2019

  • The company’s 3-year investment performance strengthened in 2Q19. The total asset under management stood at US$359.8 billion, reflecting the impact of stronger markets which was partially offset by net outflows during the quarter.
  • Adjusted diluted EPS of the company went up from US$0.56 in 1Q19 to US$0.61 in 2Q19.

Key metrics (Snapshot: Company’s Presentation)

  • 2Q19 adjusted revenue reflects higher average assets and improved performance driven by higher management fees and shareowner servicing fees.

Outlook: The outlook of the company remains encouraging and the total company investment performance is strong with 66%, 72% and 80% of AUM beating benchmarks over the 1, 3- and 5-year time periods, respectively. The company is gaining market share in US Equities in the US Retail channel. The company’s strong cash flow generation and balance sheet is supporting ongoing investments in the business to meet evolving client needs.

Stock Performance: The stock closed at A$33 on 18 October 2019. The annual dividend yield of the stock stands at 6.24%. On the valuation front, the stock is trading at a P/E multiple of 10.600X. The stock has delivered a return of 11.61% in the year to date.


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