QBE Insurance Group
Growth Across Markets: QBE Insurance Group Limited (ASX: QBE) posted healthy numbers in 1H FY18 with the net profit coming in at A$358 compared to A$345 Million in 1H FY17. The company witnessed pricing momentum across the geographies including North America.
Premium Rate Growth (Source: Company Reports)
Improved attritional claims ratio in Australia and New Zealand, better accident year COR in Europe and progress in North America are working in favor of the company. While Australia, New Zealand and Europe are strong growth regions for the company, progress in Asia and North America are notable. To cut down the losses and non-core assets, the company sold its Latin American operations to Zurich Insurance and exited from the North America personal lines.
Stock Performance: The stock has performed well over past six months generating the positive return of 8.40%. At the current juncture, the stock looks positive on the chart holding its short-term support levels and moving higher. Sighting the positive developments and growth across the geographies, we recommend ‘Buy’ in the stock at the current market price of $11.030 while some concerns over natural calamities across the US have been noted.
Boral
Headwater Business Drives Growth: Boral Limited (ASX: BLD) posted good numbers for the FY2018 with revenue coming in at $5,869 Mn compared to $4,388 Mn in FY 2017. The company did perform well with higher Earnings per share at 40.4 cents per share and increased rate of dividend.
EPS Growth (Source: Company Reports)
In FY18, the company successfully integrated its Headwaters Business into Boral North America. Boral Australia contributed significantly to the revenue, but it was North America where the maximum variance was witnessed from last year in terms of both revenue and EBITDA on the back of additional earnings from the Headwater business. Moreover, in the United States, the company has strong footing in fly ash and building products providing winning opportunities to grow.
Boral North America A$ m (Source: Company Reports)
Stock Performance: The stock has generated negative return of 8.50% over past six months but has turned positive over last three months. Overall, the growth prospects of the company look good with North America now contributing majorly to the revenue with Australia already being a strong contributor. The 14-day relative strength indicator looks in tandem with the price movement not suggesting any significant diversion. We therefore recommend ‘Buy’ in the stock at the current market price of $6.910 while the group may be in demand at the wake of the environmental challenges in the US.
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