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Peripheral Stock Focus: Metlifecare

 

MARKET CAP : $1,321M (@ $6.20 SP)

NET TANGIBLE ASSETS (1H 18) :$6.63 PER SHARE

EST. DIVIDEND YIELD : 1.5%

Metlifecare is actually the longest listed aged healthcare stock on the NZX, having listed in 1994.  It currently it operates more than 20 villages, located primarily in high-value and high-growth regions of New Zealand's upper North Island. 

Over the last year its share price is up only 12%, underperforming  its listed peers  Ryman and Summerset by 28% & 43% respectively. We feel this is because of an average  1H result (to 31 Dec 2017) due to slower than expected delivery of development units available for sale. This should be rectified in the full year result, due in August 2018.

The main reasons we like the stock are as follows:

  • Relative share price underperformance due to its peers
  • Trades at a discount to its asset backing (0.93x) when the likes of
  • Ryman (3x) and Summerset (2x) trade a considerable premiums
  • FY result likely to reflect “game of two halves” ie average 1st half, good 2nd half.
  • Favourable demographics continue to underpin a positive outlook

 

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