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- Mid caps are usually companies that have a market cap between $2 billion and $10 billion.
- Investors like the mid-cap space as these companies have a potential to grow.
- Investors looking to diversify their portfolios usually invest in these stocks.
For investors wanting to balance their portfolio, investment in the mid caps could be high growth and less volatile as compared to small caps. These companies have a potential to increase their market share and profitability as they are in the middle of their growth curve. These stocks usually represent approximately 25% of the market capitalisation of the equity markets but they may not be much exposed .
Let’s look at some of the NZX-listed mid-cap stocks with growth potential.
Vector Limited (NZX:VCT)
VCT is NZ’s leading network infrastructure company. It’s a strong company in the mid-cap space. Recently, it announced an increase of 3.5% in EBIDTA for 1HFY21 over the last year and net profit of NZ$102M, which was NZ$21.6M higher than previous year. The Chairman of the company, Jonathan Chair, said that despite the uncertainties related to COVID-19, the group had shown good results. The board has also declared a dividend for its shareholders, which will now be partially imputed as compared to its earlier policy of fully imputing the dividends.
On March17,2021 the stock was trading flat at NZ$4.126, at the time of writing this article.
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Spark New Zealand Limited (NZX:SPK)
SPK is one of the leading telecom companies in New Zealand. In February in its results for FY21, it announced a rise of 126% in its free-cash flow, amounting to NZ$113M. Income before tax stood at NZ$502M, up 0.4%. However, the revenues for 1HFY21 declined by 1.5% to NZ$1,796M.
Going forward, with the launch of its new app, SPK is aiming to drive new customers and deliver growth through customer-centric approach.
On March17,2021 the stock was trading up by 0.44% at NZ$ 4.610, at the time of writing this article.
Port of Tauranga Limited (NZX:POT)
POT offers port and cargo handling facilities for farming industry. It is one of the largest ports in New Zealand, which handles 32% of all NZ cargo, 37% of NZ exports, and 41% of all shipping containers.
POT has been resilient to COVID-19 due to diversity of its income streams and reported an increase in profits for 1HFY21. NPAT was NZ$49.4M, representing a 2.3% increase. This was despite a 1.3% decrease in the total trade volumes and a 4.6% decrease in the container numbers.
On March 17, 2021, the stock was trading up by 0.28% at NZ$ 7.800, at the time of writing.
SKYCity Entertainment Group Limited (NZX:SKC)
NZ’s leading entertainment company recently declared half-yearly results ended 31 December 2020. Recently, it has reported a revenue of $449.9 million and NPAT of $78.4 million for 1HFY21. The Company has also announced a shift in the management roles. A new CFO was appointed, who will take over the office from 1 May 2021. Even though the Company will not declare an interim dividend for FY21, it has plans to initiate new things.
On March 17, 2021, the stock was trading flat at NZ$ 3.470, at the time of writing.
RYMAN Healthcare Limited (NZX:RYM)
One of the leading healthcare companies, Ryman Healthcare performed well in the second half of 2021.
While there was a 14.2% drop to $88.4M in the unaudited underlying profits as per the half-yearly report ended 30 September 2020. Further, the Company witnessed a 12.8% rise in the reported (IFRS) profit, taking it to $212.4M. The Company has also announced an interim dividend for its shareholders of 8.8 cents per share for the six-month period.
On March 17, 2021, the stock was trading up at 0.44% at NZ$ 15.890, at the time of writing.
Mainfreight Limited (NZX:MFT)
Auckland-based MFT reported a strong performance in the year 2020. In its half-year results ending September 30, 2020, its profit before tax saw a significant growth of almost 23.4%, resulting in NZ$102.26M.The Company declared an interim dividend of 30 cents per share, which was paid on December 18, 2020. Given its strong performance, the company is confident of performing better in the future.
On March 17, 2021, the stock was trading down marginally at NZ$ 67. 700 at the time of writing.
Chorus Limited (NZX:CNU)
CNU is a telecom company. It has reported solid uptake in fibre connections. The Company has also geared up to meet the demands for fibre connections. Fibre connections increased by 62,000 to 813,000. Its net profit after tax was NZ$24M, down by 7M over the same period, and EBITDA was NZ$323M (HY20: $332m). CNU has declared an Interim dividend of 10.5 cents per share.
ALSO READ: Chorus Limited (NZX:CNU) witnesses mixed results in Q2FY21
On March 17,2021, the stock was trading up by 0.44% at NZ$ 7.985 at the time of writing.