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Dividend Portfolio: Challenger Limited (ASX: CGF)


Published 20-FEB-2015 00:00 A.M.


1 minute read

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Challenger Limited (CGF) is an investment management firm focusing on providing Australians with financial security in retirement. Challenger operates two core investment businesses, Life division, and Funds Management division. As of 31 December 2014 Total Assets Under Management were $57.2bn an increase of 12.7% compared to pcp.


Dividend and Investment View:
Strong retail sales in its annuities and growing funds under management (FUM) reflect CGF’s strong development in building a leading retirement income platform. CGF’s 52 week high is at $8.20 and its 52 week low is $5.80. The stock has retreated nearly 30% between July and December 2014 during volatile market conditions and as statutory net profit decreased 21.8% compared to pcp mainly due to tax expenses. However, the company has increased its revenue flow by 9.6% and experienced modest growth across most divisions. The board announced an interim dividend of 14.5 which is an increase of 16%. The shares will trade ex-dividend on 2 nd March 2015 payable on 31 st March 2015. The dividend is 70% franked (2013: unfranked) and Challenger expects its final dividend to be 100% franked and in the range of 45% to 50% of normalised net profit.

We are attracted to CGF’s income profile, healthy funding position, and good dividend yield. We believe the company is well-positioned to deliver long-term shareholder value and we initiate coverage with a ‘buy’ recommendation.

Please note: The recommendations of the ‘Dividend Portfolio’ have a medium to long-term outlook.


General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

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The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

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