I have been a holder since August 2010! I have continued to top up as the years have gone buy. My total return per annum on this stock is about 10%. My comparative for that period, the VAS index, has returned 12% per annum. Clearly, I could have done better in the index! Not as much fun though...
ONT has experienced a PE multiple contraction over the past 5 years 30 to about 19 now. Clearly it was expensive during the government "denticare" related boom of the peak, but I do not believe it is expensive now. Not cheap, but neither is it expensive.
A ROE of 20 remains not to shabby. It has a secure balance sheet. It has superior ROE and Gross Margins to PSQ.
In the current market with so called high interest accounts yielding 1.5%, I am ok with being a part owner of this business. I am picking up fully franked dividends and have an interest in the share price only on the day I sell it.
I do believe that the MD has the shareholders best interest (being an owner of 60% of the shares himself). His main income is from his shareholdings in ONT with a salary of sub 100,000 per year (90K per year for the past 2 years).
With a dividend yield of 4% (FF), I will be ok with a 10% return per annum over the next 10 years. I feel I am more likely to obtain that in 1300 smiles than in VAS or many other individual companies on the ASX (or internationally). Time will tell...
ONT Price at posting:
$6.06 Sentiment: Buy Disclosure: Held
