NAB has sold their remaining 20% share of MLC Insurance to Nippon Life for $500 million. From what I can gather, MLC had circa $1.9 billion premiums in force, which equates to circa $1.32 per $1 premium in force.
Clearview has circa $360 million premiums in-force with a market cap of $233 million, which implies 65 cents per $1 premium in force or roughly half of what the MLC Insurance sale went through at.
Very simplistic comparison as individual insurer profitability matters, though it is an interesting comparison.
I'm using the current share price weakness as an opportunity to accumulate. Management has guided towards double-digit underlying NPAT growth with 40-60% dividend payout ratio.
If they hit 10% underlying NPAT growth they will go from $35.3 million (2024 Group) to $38.9 million
40% payout ratio is $15.5 million or 2.4 cents dividends per share or 6.8% fully franked dividend yield.
60% payout ratio (as per last year) is 3.6 cents dividends per share or 10% fully franked dividend yield.
For a business that has a solid runway for ongoing NPAT growth the current valuation is compelling. If we look at a 5-10 year timeframe, the growth outlook is strong as they hold just 3.5% market share, they are attracting 11% new business share the life insurance industry is potentially at a long term inflection point. New business volumes have been recovering, the liberals are discussing reinstating higher commission rates for advisers (which is absolutely necessary to make life insurance advice economically viable).
This is not advice - please seek your own financial advice.
CVW Price at posting:
36.0¢ Sentiment: Buy Disclosure: Held
A personalised tool to help users track selected stocks. Delivering real-time notifications on price updates, announcements, and performance stats on each to help make informed investment decisions.
(20min delay)