That’s expensivevcompared to the $1.54 or so at last DRP
Printable View
Plugging in a representative yield of 7.5%, one that IMO represents an appropriate risk for the ups and downs of the banking cycle of Heartland in its current form, we can now arrive at our 'Capitalised Dividend Model' valuation.
(Representative Dividend per Share) / (Acceptable Gross Yield) = Share Price (an algebraic manipulation of: Dividend per Share / Share Price = Yield )
9.0c / (0.72 x 0.075) = $1.67
A reminder here that NTA was
($687.600m - $72.159m) / 577.468m = $1.07 cps
at the half year FY2020 balance date. This means my 'fair valuation' is at a good premium (+56%) to net tangible asset value.
This $1.67 valuation is measured at the average point in the business cycle. My rule of thumb is that over the business cycle the actual share price will fluctuate between 80% and 120% of capitalised dividend fair value. This gives a target share price range for HGH of $1.34 to $2.00. $1.90, where the share is trading today, looks a ten cents or so above fair value. My target accumulation price (10% below fair value) is now $1.50. And yes I could add the upcoming 4.5c interim dividend onto that fair value.
SNOOPY
You really need to get a new valuation model Snoopy. Much erlier today I called it as fair value at $1.89, which is exactly where the VWAP and closing price turned out to be.
You really are in dreamland if you think you can buy more for $1.50.
I didn't say I expected the price to go down to $1.50 Beagle. I said if the price did go down to $150, or $1.54.5 cum divie , then I would accumulate some more. I don't have to buy more. I would like to buy more at the right price. And buying at the right price on today's inflated market is a rare opportunity, not something I would expect to have every day.
My simple valuation model is based purely on dividends paid over the business cycle, with all the strengths and weaknesses that are inherent in that method.
Not good. But if HGH need to raise some new capital to buy UDC for example, then you never know. I am ready should the opportunity present itself.
SNOOPY
More likely to hit $2.50 [my target price] than $1.50...........lol.
With the withdrawal of Holden from the vehicle market the value of used Holden's will crash.
Heartland who are the underwriter of Holden Finance in NZ will be hoping the residual value of any leases they have written have enough resilience to withstand the hit.
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Boop boop de do
Marilyn
our dairy price kept falling due to China coronavirus!!
https://www.nzherald.co.nz/business/...ectid=12309694
not sure....with many companies starting to announce the impact of corona virus in china...
Share price hasn’t even gone up by the size of the divie .....quite often this happens.
Punters worried that 10% growth in H1 and only 3% growth (if not flat) for FY20 not good and doesn’t cut the mustard.