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Highlights

  • Macquarie reaffirms Outperform rating on Steadfast Group with an AUD 6.80 price target.

  • Steadfast's international assets contribute ~7.5% to group earnings, with potential to reach 15%.

  • Shares trade at a ~24.6% discount to global peers, especially compared to TWFG.

  • Forecasted dividend yields of 3.35% to 3.7% over FY25–FY27 support income appeal.

Shares of Steadfast Group Ltd (ASX:SDF) may offer considerable value at current levels, according to analysts at Macquarie Group Ltd (ASX:MQG). In its latest research note, the investment firm has reiterated an Outperform rating on the ASX 200 insurance intermediary, supported by the company’s international expansion and dividend outlook.

Macquarie's analysis draws attention to Steadfast’s strategic focus on growing its international footprint. The company currently holds offshore assets in New Zealand, Asia, London (via HWS), Europe (through UnisonSteadfast), and the United States (via ISU Steadfast). These international investments now account for approximately 7.5% of Steadfast’s total earnings, a figure expected to rise to 15% in the near future, prompting expectations of more detailed financial disclosures.

The broker underlines that this international growth story is not yet fully reflected in Steadfast’s share price. It points out that the company is currently trading at a 24.6% discount to its international peers on a two-year forward price-to-earnings (PE) basis. This is notable, given that Steadfast has historically traded at a 2.4% premium to the same group. This valuation gap, Macquarie suggests, presents a potential opportunity for upside.

Among global peers, TWFG stands out as the most comparable business model to Steadfast due to its network-based structure and clear M&A strategy. Notably, TWFG is currently trading at a 40.4x two-year forward PE, which represents a 135% premium over Steadfast’s multiple. 

On the back of this assessment, Macquarie has maintained its 12-month price target of AUD 6.80, suggesting a potential upside of around 14% based on the current share price of AUD 5.96. The firm highlights that the success of Steadfast’s US expansion strategy could significantly enhance long-term shareholder value.

Beyond growth prospects, Steadfast is also regarded as a reliable income-generating stock. Macquarie expects the company to maintain its track record of consistent dividend payments. The broker forecasts fully franked dividends of 20 cents per share in FY25, rising to 21 cents in FY26 and 22 cents in FY27. At the current trading price, this corresponds to dividend yields of 3.35%, 3.5%, and 3.7%, respectively.