Heartland Group Holdings Limited

Is this Banking Stock worth Considering - HGH

Section 1: Company Overview and Fundamentals

1.1 Company Overview:

Heartland Group Holdings Limited (NZX: HGH) is a financial services company based in New Zealand. Its divisions include Motor, Reverse Mortgages, Personal Lending, Business, Rural, StockCo Australia, and operations in Australia.

Kalkine’s Investor Report covers the Key Financial Metrics, Risks, Outlook, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

1.2 The Key Positives, Negatives, Investment Highlights and Risks

1.3 Top 10 Shareholders: The top 10 shareholders have been highlighted in the chart, which together form ~20.58% of the total shareholding.

1.4 Key Metrics:

Following are some of the metrics:

Section 2: Financial Highlights

2.1 Financial Highlights for FY 2024:

Section 3: Key Risks and Outlook:

3.1 Dividend History:

Heartland has announced a final dividend of 3.0 cents per share for FY24, down from 6.0 cps in FY23, resulting in a dividend yield of 8.7%, compared to 9.3% the previous year. The total dividend payout ratio for FY25 is 55% of underlying NPAT, reflecting the recent NZD 210 million equity raise, the acquisition of Challenger Bank, and associated growth opportunities.

Section 4: Stock Recommendation Summary:

The stock has witnessed a fall of ~7.14% in 6 months. The stock has a 52-week high and 52-week low of NZD 1.709 and NZD 0.960, respectively.

On the daily chart, HGH prices have demonstrated a recovery from lower levels, indicating a potential reversal at the current price point. The 14-period Relative Strength Index (RSI) shows a reading of approximately 00.00, suggesting positive momentum and the potential for further bullish movement. Additionally, the current price is trading above the 21-period Simple Moving Average (SMA), which is expected to serve as a support level.

Key support levels are NZ 0.91 and NZD 0.98, while resistance levels are identified at NZD 1.14 and NZD 1.23.

4.1 Recommendation

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is October 14, 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

 Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavorable movement in the stock prices.