Originally Posted by
winner69
Hey Rawz - your NTA query the other day might be better explained if I used how Heartlands Book Value (Shareholder Equity) has eveolved over the last 10 years.
At July 2012 BV was $375m / $0.96 a share. July 2022 BV was $808m / $1.36 share - BV per share has grown at 3.5% pa ....which doesn't seem right for a 'growth' company.
How has the $375m grown to $808m?
Additional shareholder capital of $258m has been put in - $158 from capital raises and $100m from the DRIP. There are 204m more shares than in 2012
In those 10 years profits were $601m and dividends of $416m were paid. Along with bit of other stuff (reserves etc) this means Retained Earnings (to fund growth) have increased by $176m
In summary - Heartland has $344m more capital than 10 years ago. Shareholders have put in another $258m over the 10 years and $175m of profits have been retained.
Jeff will see all this as a balancing act between making respectable returns (ROE), having sufficient capital and keeping shareholders happy.
Real invest managers will view / value Heartland on a Yield / Price Book multiple basis and possibly why not that many (growth?)funds don't seem to have in their portfolio.
Solid dividend yield but share price will likely continue to be 'suppressed' (not go up as fast as some expect) as essentially valued on that Price/Book basis where that Book Value not growing at a fast rate. But as we've seen that Price / Book ratio has ranged from below 1 to 1.9 over the last 5 years which has resulted in large swings in the share price
Of course the new $200m of capital has raided the Book Value to $1.44 - average P/B last 5 years has 1.4 so maybe $2.00 is a 'fair' valuation at the moment (with a bit of +/- over time eh)