PE and yield are both trading as if this is a fairly high-risk play. EPS guidance is around 16.2c normalised which is a forward PE of around 7.7 and if we assume a flat payout ratio annual div would be around 12c fully franked which is a net yield of 9.7% and gross yield of 13.8%!
These numbers would imply the market sees a significant risk around future earnings. I know there is ongoing legal action but I suspect they'll get through that with a fairly modest fine, at any rate it should be a one off hit. Then with interest rates coming down I'm at a loss to explain why it's trading at this valuation?
SVR Price at posting:
$1.24 Sentiment: None Disclosure: Held
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