Which big plays should you buy?

REA Group Limited

REA Dividend Details
 
Maintaining leadership and well ahead of the immediate competitor performance: For the half year ended December 31, 2015, REA Group Limited (ASX: REA) reported a solid increase of 20% in revenue to $314.8 million while maintaining its leadership in the Australian markets. EBITDA rose 29% to $185.9 million and net profit after tax increased 28% to $121 million or 91.9 cents per share during the period. REA products are resonating well with consumers with an indication of its Australian sites having over 42 million visits a month on average.
 

First half highlights (Source: Company reports)
 
In the last six months, REA stock has recorded a gain of 16.08% (as of April 04, 2016) as the group’s audience continues to be way higher than its immediate competitors. REA also declared a strong interim dividend which is higher by 22% to 36 cents per share. We recommend a "HOLD" rating on the stock at the current share price of  $52.99
 
 
REA Daily Chart (Source: Thomson Reuters)
 

SEEK Limited

SEK Dividend Details
 
Delivering organic growth: SEEK Limited (ASX: SEK) rallied over 5.93% in the past three months (as of April 04, 2016) as the group recorded a revenue growth of 22% with 16% organic growth ($482 million) and 6% through merger and acquisition of SEEK Asia. With a growth of 17% in its operating cash flow, the company had the room for raising its interim dividend by 11%. Management reiterated their fiscal year of 2016 guidance with revenue growth in the range of 15% to 18%. The group is trading at a moderate P/E ratio, and we rate the stock a "HOLD" at the current share price of  $15.49
 
 
SEK Daily Chart (Source: Thomson Reuters)
 

Woolworths Ltd

WOW Dividend Details
 
Rebuilding WOW business: Recently, Woolworths Limited (ASX: WOW) announced that Moody's Investors Service downgraded its issuer rating on senior unsecured notes by one notch to Baa2 with negative outlook while Standard & Poor’s BBB+ rating with negative outlook remains unchanged. For half year 2016, total group sales were down 1.4% to $32 billion and net profit after tax down 176% to $972.7 million. However, WOW continues to have a solid credit profile and is confident the execution of its strategy will deliver the best outcome for its customers and investors. In the process of rebuilding, WOW has significantly invested in price, service and customer experience in Australian supermarkets.
 

Business rebuilding (Source: Company reports)
 
Also, it has appointed a new Group and BIG W CEO and announced WOW's exit from home improvement business. Trading at a strong dividend yield at the back of the efforts to revamp business coupled with improving consumer sentiment, we rate the stock "BUY" at the current share price of  $21.36
 
 
WOW Daily Chart (Source: Thomson Reuters)
 

Washington H Soul Pattinson and Co. Ltd.

SOL Dividend Details
 
Diversified portfolio: Washington H Soul Pattinson and Co. Ltd. (ASX: SOL) reported half yearly profit of $95.4 million for the half year ended in January 2016, an increase of 41.7% from the prior year period. The profit was led by higher contributions from TPG Telecom Limited, Brickworks Limited and Australian Pharmaceutical Industries Limited.
 

Portfolio performance of SOL (Source: Company reports)
 
On the other hand, these gains were offset by the impact of commodity prices on other divisions of SOL. Trading at a high P/E ratio, and the stock gaining 3.27% (as of April 04, 2016) in the past one month, we believe that the stock is "Expensive" at the current share price of  $16.41
 
 
SOL Daily Chart (Source: Thomson Reuters)
 

Magellan Financial Group Ltd

MFG Dividend Details
 
Growth from funds under management performance:Magellan Financial Group Ltd (ASX: MFG) continued to deliver strong average funds under management (FUM) which increased 44% to $38.8 billion for the half year ended December 31, 2015, while net profit after tax was up 41% to $109.3 million resulting in EPS of 63.7 cents per share. The group also has a strong balance sheet with net assets of $361.8 million. Meanwhile, MFG reported record average monthly retail net inflows of $214 million during the first half.
 

Global Equity Peer Comparison - Investment Performance for period to 31 December 2015 in USD (Source: Company reports)
 
On the other hand, MFG FUM declined from last few months, with February 2016 FUM reaching $38,802 million as compared to $39,571 million in January 2016. However, given the strong track record of management and recovering economic conditions, we believe MFG stock has the potential to rally higher in the coming months. The group is delivering a decent dividend yield, while the company declared an interim dividend of 51.3 cents, a 38% increase. Based on the foregoing, we give a "BUY" recommendation for MFG at the current share price of  $21.43
 
 
MFG Daily Chart (Source: Thomson Reuters)
 

Computershare Ltd

CPU Dividend Details
 
Top line pressure: Computershare Limited’s (ASX: CPU) total revenues & other income decreased by 1.9% to $941.5 million while underlying net profit after tax was down 10.5% to $143.8 million for the first half of 2016.
 

Client balances and margin income (Source: Company reports)
 
Looking ahead, the company estimates full year 2016 management earnings per share to be almost 7.5% lower than the prior year mainly due to the dual effects of the stronger USD and lower yields on client balances. CPU is seeing softening in the operating environment. Meanwhile, we believe that the stock is trading at a high P/E ratio. Given the cautious outlook and challenging economic conditions, we rate the stock "Expensive" at the current share price of  $9.52
 
 
CPU Daily Chart (Source: Thomson Reuters)

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