WPL.ASX 1H16 underlying profit of $340m was down 50% on 1H15. IH16 EPS $0.41 and DPS (down 50%) to $0.34
Fy17 outlook is for full year EPS of $1.30 and DPS of $0.90 placing the stock on a forward yield of 4.5%.
The stock appears to be in the early stage of a break higher and for the time being, we leave this name uncapped from a call option perspective.
MPL.ASX NPAT $418m on EPS of $0.154 and final dividend of $0.065
FY17 outlook is for more of the same, growth will be difficult to achieve and revenue will remain flat, whilst net insurance margins will likely decline or remain flat at best. FY17 EPS $0.15 and DPS $0.12
Buy on a pullback into the $2.60 $2.75 range. Our algorithm engines will track for the entry alert.
IAG.ASX reported FY16 cash NPAT of $867m and EPS of $0.36 and a final dividend of $0.13
FY17 guidance is for slightly softer insurance margins and DPS of $0.28 placing stock on a forward yield of 5%.
We’re comfortable buying IAG.ASX on a pullback to $5.50
QBE 1H16 NPAT of US$265m was 10% below consensus. Growth in insurance margins remain elusive and return on invested capital shows little sign of improving in the low bond yield world.
Forecast FY17 dividends are likely to be at or near US$0.51 per share, placing the stock on a forward yield of 5%.
In summary, BHP posted a solid result with both NPAT and EBIT beating consensus. With the final dividend coming in at US14cps, FY16 total dividends of US30cps, the total dividends for the year are below expectations. In FY17 we remain hopeful we’ve seen the bottom of the cycle for BHP earnings.
If you don’t review the graph of iron ore very often, you may appreciate the images below.
12 month close $56
20-year history.
SGP.ASX delivered 7%+ EPS growth and reported profit of $890m, which was in line with market expectations. FY17 should deliver growth of 5 – 7%, placing the stock on a forward yield of 5.2%, based on $0.25 of dividends.
We’re cautious of the valuation and future earnings certainty in SGP and therefore, would prefer to look for an entry point at lower prices. Our algorithm engines will alert us, when and if a suitable buy point occurs.
SHL.ASX FY16 earnings per share growth of 21% was better than market expectations. FY17 the stock trades 22x on an expected yield of 3.4%
We own this name in the model from lower levels and see the stock price well supported and suitable for a buy write strategy.
CWN FY16 NPAT $406m is down 23% on the same time last year. Normalised EBITDA was up 4% and EBIT up 2% on last year.
FY17 outlook on our numbers suggests that Crown could grow EBITDA earnings per share around 5% to $900m and payout $0.60 per share in dividends. This places the stock on a forward yield of 4.2%.
We retain our long exposure and feel there’s added value yet to come from the proposed break up of CWN.
CSL.ASX reported FY16 revenue of $6.1b on EBITDA of $1.65b. The $500m share buyback is less than conducted in the previous 2 years but will still provide marginal buy side support to underpin the stock. In FY17 we see revenue growing to $6.5b and EBIT in the range of $1.8b suggesting the underlying business can continue to grow at around 12%. This places CSL.ASX on a 12 month forward PE of 27x with a yield of 1.4% assuming dividends per share of $1.30.
An okay result and a stable outlook underpins CSL as a buy write . We own it at lower levels in the model and generated significant call premium earlier in the year when selling December call options.
DMP.ASX now trades on a forward yield 1.5% assuming EPS of $1.40 into FY17. This places the stock on 50x multiple and the market assumes the business can continue to grow EPS by 30%+ per annum.
Current market cap $6.5b
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