- Blue-chip client base.
- High recurring revenue.
- Strong free cash flow.
A workforce benefits and health insurance provider that supports the health and wellbeing of more than 1mn employees is primed to deliver strong earnings growth in the coming years. It’s not priced in.
Trading on 1.6 times book value and a prospective price/earnings (PE) ratio of 11.6, the rating simply fails to reflect the board’s ability to continue delivering organic growth from its core insurance and workplace benefits businesses and expectations for 64 per cent EPS growth over the 2024-2026 forecast period. For good measure, the cash-rich company recycles more than 80 per cent of its net profit as dividends, offering an attractive 7.7 per cent current year dividend yield and the pay-out could easily be hiked sharply over the next two years.
