Four Stocks in Lending Sector

 
Pepper Group Ltd

PEP Details
 
New markets and higher profits: Pepper Group Ltd (ASX: PEP) stock plunged over 31.71% (as of March 11, 2016) during this year to date impacted by the recent volatility in the global markets. On the other hand, Pepper Ireland, part of global financial services business Pepper Group announced that it is entering the Irish mortgage market with the launch of a suite of new mortgage products and the establishment of a dedicated new lending division, Pepper Homeloans.
 
 

Strong financials and AUM (Source: Company reports)
 
Moreover, for the calendar year 2015, PEP reported adjusted net profit after tax of $48.6 million, an increase of 38% from previous year. Assets under management increased 59% to $45.5 billion while PEP declared its maiden interim fully franked dividend of 3 cents per share. Looking ahead, PEP targets an adjusted NPAT of at least $59 million for full calendar year 2016. The stock has been indicated as an addition in All Ordinaries Index as per March 2016 quarterly update on S&P Dow Jones Indices. We believe that the heavy correction in the stock placed PEP at very attractive valuations and accordingly we rate the stock a "Speculative Buy" at the current price of  $2.39
 
 
PEP Daily Chart (Source: Thomson Reuters)
 

Money3 Corp Ltd

 
 

MNY Dividend Details
 
Record half year result: Money3 Corp Ltd  (ASX: MNY) reported record first half financial year 2016 results with net profit after tax of $10 million, an increase of 37.3% from previous year. Revenue rose 45.4% to $47.4 million led by broker division which witnessed increased revenue by 60.1%. Meanwhile, EBITDA was up 44.8% to $17.1 million as online division significantly increased EBITDA contribution to $1.8 million driven by the Cash Train acquisition. For FY16, net profit after tax is seen at $19 million, higher by 36.3% from prior year.
 

Financial highlights (Source: Company reports)
 
Meanwhile, MNY surged over 11.11% (as of March 11, 2016) in the last three months and we believe this momentum in the stock to continue in the coming months. With a strong dividend yield, interim dividend of 2.75 cents per share (10% up from prior year period) and the above stated factors, we rate the stock a "Speculative Buy" at the current share price of  $1.00
 
 
MNY Daily Chart (Source: Thomson Reuters)

 
Mortgage Choice Ltd

MOC Dividend Details
 
Strong interim result: Mortgage Choice Ltd (ASX: MOC) reported first half total group revenue of $102.3 million, an increase of 5.4% from the prior year period with Franchisee revenue growing by 8.6% yoy during the period. Net profit after tax on cash basis stood at $10.1 million, an increase of 12.4% from prior year, marking the company's strongest ever interim profit result. Total loan book crossed the $50 billion milestone and touched $50.7 billion, an increase of 4.7% from the prior year period driven by an 8.5% surge in home loans to $6.2 billion.
 

Strong 1H16 results (Source: Company reports)
 
Mortgage Choice is trading at an outstanding dividend yield, and even declared an interim dividend of 8 cents per share indicating an increase from 7.5 cents earlier. We believe that the group is trading at very attractive valuations with a cheaper P/E as compared to its peers. The stock has fallen over 12.82% (as of March 11, 2016) during this year to date due to tough market conditions across the globe. However based on the above stated positive financials, we rate the stock a "BUY" at the current share price of  $1.70
 
 
MOC Daily Chart (Source: Thomson Reuters)
 

Eclipx Group Ltd

ECX Dividend Details
 
New contract and strong financials: Recently, Eclipx Group Ltd (ASX: ECX) announced that the NSW government has appointed its wholly owned subsidiary FleetPartners Australia to its panel of vehicle leasing providers to agencies across the government. This will be for fleet leasing for more than 22,000 vehicle fleet. The group also delivered a strong financial performance for financial year 2015, with the company posting a 33% growth in cash net profit after tax to $48.6 million, New Business Written witnessing increase of 35% to $841 million and assets under management or financed (AUMOF) rose 12% to $1.78 billion.
 

FY15 Highlights (Source: Company reports)
 
The company announced a final dividend of 6.5 cents per share for the second half of FY15 which is within the 60% to 70% payout range. Looking ahead, company expects double digit growth in AUMOF and NPATA growth of 7% to 10% in FY16. The stock has been indicated as an addition in S&P/ASX All Australian 200 Index as per March 2016 quarterly update on S&P Dow Jones Indices. Based on the company's developments and supporting financials, we rate the stock "Speculative Buy" at the current share price of  $2.92
 
 
ECX Daily Chart (Source: Thomson Reuters)

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