Genworth Mortgage Insurance Australia Limited

2018 expected to be a transitionary year: Genworth Mortgage Insurance Australia Limited’s (ASX: GMA) stock was up by 3.9% on April 11, 2018 with rise in positive sentiments for the stock in terms of market’s view on Net Earned Premium (NEP). NEP has however been said to be impacted by 2017 earnings curve review, while there is market correction in housing sector in Australia. Recently, GMA disclosed to the ASX that Leon Ellis Roday has a direct interest in the company and acquired 258.452931 deferred shares units (DSU) in MIC class with the value consideration of C$10,625. On the other hand, Genworth’s 2017 full year financial results entailed statutory NPAT of $149.2m and underlying NPAT of $171.1m (down 19.4%). The key driver of the performance was a higher realised investment gain than forecasted. Besides this, the company has begun several capital management initiatives designed to bring the company’s solvency ratio more in line with the Board’s target range. The Board of Directors declared fully franked ordinary dividend totalling 24 cents per share, which is representing a pay-out ratio of 70.3 per cent up from 67.2 per cent in 2016. In addition, a fully franked special dividend of 2 cents per share was also declared during the same period. The management expects that 2018 will be a transitionary year for the business as the group aims to implement strategic initiatives. The stock price was down by 21.58 per cent in the past six months and up 1.33% in the past five days as on April 10, 2018. Based on economic factors and domestic demand in housing sector, we recommend to “Hold” the stock at the current market price of $2.38
 

Home Value Index (Source: Company Reports)

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