ASX:RMC

Stock Analysis Report

Executive Summary

Resimac Group Ltd, a non-bank financial institution, provides residential mortgage solutions in Australia and New Zealand.

Rewards

PE ratio (12.8x) is below the Australian market (18.9x)

Earnings are forecast to grow 4.01% per year

Earnings grew by 86.4% over the past year

Risk Analysis

Highly volatile share price over past 3 months

Large one-off items impacting financial results



Snowflake Analysis

Proven track record and slightly overvalued.


Similar Companies

Yellow Brick Road Holdings

ASX:YBR

Share Price & News

How has Resimac Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: RMC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-1.0%

RMC

0.8%

AU Mortgage

2.6%

AU Market


1 Year Return

159.6%

RMC

43.6%

AU Mortgage

19.8%

AU Market

Return vs Industry: RMC exceeded the Australian Mortgage industry which returned 48% over the past year.

Return vs Market: RMC exceeded the Australian Market which returned 19.4% over the past year.


Shareholder returns

RMCIndustryMarket
7 Day-1.0%0.8%2.6%
30 Day6.5%2.7%4.0%
90 Day68.2%2.1%5.7%
1 Year169.8%159.6%63.0%43.6%25.2%19.8%
3 Year281.1%244.2%44.7%8.6%40.7%21.9%
5 Yearn/a54.6%-11.3%62.0%25.5%

Price Volatility Vs. Market

How volatile is Resimac Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Resimac Group undervalued compared to its fair value and its price relative to the market?

12.59x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: RMC (A$1.5) is trading above our estimate of fair value (A$0.9)

Significantly Below Fair Value: RMC is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: RMC is good value based on its PE Ratio (12.8x) compared to the Mortgage industry average (13.7x).

PE vs Market: RMC is good value based on its PE Ratio (12.8x) compared to the Australian market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: RMC is poor value based on its PEG Ratio (3.2x)


Price to Book Ratio

PB vs Industry: RMC is overvalued based on its PB Ratio (3.1x) compared to the AU Mortgage industry average (1x).


Next Steps

Future Growth

How is Resimac Group forecast to perform in the next 1 to 3 years based on estimates from 1 analyst?

4.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: RMC's forecast earnings growth (4% per year) is above the savings rate (1.1%).

Earnings vs Market: RMC's earnings (4% per year) are forecast to grow slower than the Australian market (9.6% per year).

High Growth Earnings: RMC's earnings are forecast to grow, but not significantly.

Revenue vs Market: RMC's revenue (2.9% per year) is forecast to grow slower than the Australian market (3.8% per year).

High Growth Revenue: RMC's revenue (2.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: RMC's Return on Equity is forecast to be low in 3 years time (19.3%).


Next Steps

Past Performance

How has Resimac Group performed over the past 5 years?

42.2%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: RMC has a large one-off gain of A$13.1M impacting its June 30 2019 financial results.

Growing Profit Margin: RMC's current net profit margins (32.7%) are higher than last year (19.4%).


Past Earnings Growth Analysis

Earnings Trend: RMC has become profitable over the past 5 years, growing earnings by 42.2% per year.

Accelerating Growth: RMC's earnings growth over the past year (86.4%) exceeds its 5-year average (42.2% per year).

Earnings vs Industry: RMC earnings growth over the past year (86.4%) exceeded the Mortgage industry 17.4%.


Return on Equity

High ROE: Whilst RMC's Return on Equity (24.06%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Resimac Group's financial position? (This company is analysed differently as a bank or financial institution)


Financial Position Analysis


Debt to Equity History and Analysis


Balance Sheet

Inventory Level: RMC has a low level of unsold assets or inventory.

Debt Coverage by Assets: RMC's debt is covered by short term assets (assets are 1x debt).


Financial Institutions Analysis

Asset Level: RMC's level of assets compared to its equity is very high.

Allowance for Bad Loans: Insufficient data to determine if RMC has a sufficient allowance for bad loans.

Low Risk Liabilities: RMC reports no customer deposits, loans are made up entirely of externally borrowed funds.

Loan Level: Insufficient data to determine if RMC has an acceptable proportion of non-loan assets held.

Low Risk Deposits: RMC has advanced significantly more loans than the customer deposits it holds.

Level of Bad Loans: Insufficient data to determine if RMC has an appropriate level of bad loans.


Next Steps

Dividend

What is Resimac Group's current dividend yield, its reliability and sustainability?

1.35%

Current Dividend Yield


Dividend Yield vs Market

company1.4%marketbottom25%2.3%markettop25%5.4%industryaverage2.6%forecastin3Years2.4%

Current dividend yield vs market & industry

Notable Dividend: RMC's dividend (1.33%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.34%).

High Dividend: RMC's dividend (1.33%) is low compared to the top 25% of dividend payers in the Australian market (5.47%).


Stability and Growth of Payments

Stable Dividend: RMC is not paying a notable dividend for the Australian market, therefore no need to check if payments are stable.

Growing Dividend: RMC is not paying a notable dividend for the Australian market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: RMC is not paying a notable dividend for the Australian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of RMC's dividend in 3 years as they are not forecast to pay a notable one for the Australian market.


Next Steps

Management

What is the CEO of Resimac Group's salary, the management and board of directors tenure and is there insider trading?

1.5yrs

Average management tenure


CEO

Scott McWilliam 0

1yrs

Tenure

AU$899,806

Compensation

Mr. Scott McWilliam has been Chief Executive Officer of Resimac Group Ltd since January 18, 2019. He was Joint Chief Executive Officer of Resimac Group Ltd (formerly known as Homeloans Limited) since Octob ...


CEO Compensation Analysis

Compensation vs Market: Scott's total compensation ($USD620.98K) is about average for companies of similar size in the Australian market ($USD724.04K).

Compensation vs Earnings: Scott's compensation has increased by more than 20% in the past year.


Management Age and Tenure

1.5yrs

Average Tenure

Experienced Management: RMC's management team is not considered experienced ( 1.5 years average tenure), which suggests a new team.


Board Age and Tenure

2.7yrs

Average Tenure

Experienced Board: RMC's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Danielle Corcoran

    Co-Company Secretary

    • Tenure: 1.3yrs
  • Kym Carter

    Head of Human Resources

    • Scott McWilliam

      Chief Executive Officer

      • Tenure: 1yrs
      • Compensation: AU$899.81k
    • Marianne Hannah

      General Manager of Operations

      • Will Keall

        Head of Marketing

        • Peter Fitzpatrick

          Company Secretary

          • Tenure: 3.3yrs
        • Matthew Hillier

          General Manager of Finance

          • Tenure: 1.5yrs
        • Jason Azzopardi

          Chief Financial Officer

          • Tenure: 1.5yrs
          • Compensation: AU$419.55k

        Board Members

        • Warren McLeland (73yo)

          Non-Executive Director

          • Tenure: 3.3yrs
          • Compensation: AU$82.13k
        • Duncan Saville (62yo)

          Non-Executive Director

          • Tenure: 2.2yrs
          • Compensation: AU$70.00k
        • Chum Darvall

          Independent Non-Executive Chairman

          • Tenure: 2.2yrs
          • Compensation: AU$137.10k
        • Susan Wood-Hansen

          Independent Non-Executive Director

          • Tenure: 3.3yrs
          • Compensation: AU$121.74k

        Company Information

        Resimac Group Ltd's company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Resimac Group Ltd
        • Ticker: RMC
        • Exchange: ASX
        • Founded: 1985
        • Industry: Thrifts and Mortgage Finance
        • Sector: Banks
        • Market Cap: AU$609.868m
        • Shares outstanding: 406.58m
        • Website: https://www.resimac.com.au

        Location

        • Resimac Group Ltd
        • 45 Clarence Street
        • Level 9
        • Sydney
        • New South Wales
        • 2000
        • Australia

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        RMCASX (Australian Securities Exchange)YesOrdinary SharesAUAUDOct 2016
        RMCCHIA (Chi-X Australia)YesOrdinary SharesAUAUDOct 2016

        Biography

        Resimac Group Ltd, a non-bank financial institution, provides residential mortgage solutions in Australia and New Zealand. The company operates through three segments: Australian Lending Business, New Zealand Lending Business, and Paywise Business. It offers prime and specialist lending products; and home loans. The company also provides mortgage originator, trustee, lender, manager, and broker services; and LMI captive insurer and record lending services. In addition, it act as a trust manager and servicer; and offers services to manage salary packaging arrangements to employers and employees. Further, the company provides fleets and warehouse mortgages. Resimac Group Ltd provides its products and services through brokers and white-label partners, as well as direct-to-customer consumer channel primarily under the Resimac and State Custodians brands. The company was formerly known as Homeloans Limited and changed its name to Resimac Group Ltd in December 2018. Resimac Group Ltd was founded in 1985 and is based in Sydney, Australia. Resimac Group Ltd operates as a subsidiary of Somers Limited 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/21 10:46
        End of Day Share Price2020/01/21 00:00
        Earnings2019/06/30
        Annual Earnings2019/06/30


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.