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CGF

ChallengerASX:CGF Stock Report

Market Cap

AU$4.7b

7D

6.4%

1Y

49.8%

Updated

26 Oct, 2021

Data

Company Financials +
CGF fundamental analysis
Snowflake Score
Valuation2/6
Future Growth0/6
Past Performance2/6
Financial Health4/6
Dividends4/6

CGF Overview

Challenger Limited is a publicly owned investment manager.

Challenger Competitors

AMP

ASX:AMP

AU$3.8b

Commonwealth Bank of Australia

ASX:CBA

AU$179.8b

Westpac Banking

ASX:WBC

AU$94.2b

National Australia Bank

ASX:NAB

AU$94.1b

Price History & Performance

Summary of all time highs, changes and price drops for Challenger
Historical stock prices
Current Share PriceAU$7.10
52 Week HighAU$4.57
52 Week LowAU$7.37
Beta0.96
1 Month Change13.97%
3 Month Change25.22%
1 Year Change49.79%
3 Year Change-32.38%
5 Year Change-33.89%
Change since IPO178.43%

Recent News & Updates

Shareholder Returns

CGFAU Diversified FinancialAU Market
7D6.4%4.7%0.8%
1Y49.8%20.3%24.4%

Return vs Industry: CGF exceeded the Australian Diversified Financial industry which returned 20.3% over the past year.

Return vs Market: CGF exceeded the Australian Market which returned 24.4% over the past year.

Price Volatility

Is CGF's price volatile compared to industry and market?
CGF volatility
CGF Beta0.96
Industry Beta0.92
Market Beta1

Stable Share Price: CGF is less volatile than 75% of Australian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: CGF's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
1985738Richard Howeshttps://challenger.com.au

Challenger Limited is a publicly owned investment manager. The company also provides retirement services to its clients. It manages equity mutual funds.

Challenger Fundamentals Summary

How do Challenger's earnings and revenue compare to its market cap?
CGF fundamental statistics
Market CapAU$4.72b
Earnings (TTM)AU$592.30m
Revenue (TTM)AU$3.34b

8.1x

P/E Ratio

1.4x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
CGF income statement (TTM)
RevenueAU$3.34b
Cost of RevenueAU$1.91b
Gross ProfitAU$1.44b
ExpensesAU$843.80m
EarningsAU$592.30m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

Feb 17, 2022

Earnings per share (EPS)0.88
Gross Margin42.97%
Net Profit Margin17.72%
Debt/Equity Ratio174.5%

How did CGF perform over the long term?

See historical performance and comparison

Dividends

3.0%

Current Dividend Yield

23%

Payout Ratio

Valuation

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

8.09x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CGF (A$7.1) is trading above our estimate of fair value (A$6.91)

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


Price To Earnings Ratio

PE vs Industry: CGF is good value based on its PE Ratio (8.1x) compared to the Australian Diversified Financial industry average (17.2x).

PE vs Market: CGF is good value based on its PE Ratio (8.1x) compared to the Australian market (20x).


Price to Earnings Growth Ratio

PEG Ratio: CGF's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: CGF's PB Ratio (1.3x) is in line with the AU Diversified Financial industry average.


Future Growth

How is Challenger forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

-3.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CGF's earnings are forecast to decline over the next 3 years (-3.3% per year).

Earnings vs Market: CGF's earnings are forecast to decline over the next 3 years (-3.3% per year).

High Growth Earnings: CGF's earnings are forecast to decline over the next 3 years.

Revenue vs Market: CGF's revenue is expected to decline over the next 3 years (-34.1% per year).

High Growth Revenue: CGF's revenue is forecast to decline over the next 3 years (-34.1% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CGF's Return on Equity is forecast to be low in 3 years time (9.3%).


Past Performance

How has Challenger performed over the past 5 years?

-25.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CGF has high quality earnings.

Growing Profit Margin: CGF became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: CGF's earnings have declined by 25.6% per year over the past 5 years.

Accelerating Growth: CGF has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: CGF has become profitable in the last year, making it difficult to compare its past year earnings growth to the Diversified Financial industry (-19%).


Return on Equity

High ROE: CGF's Return on Equity (15.5%) is considered low.


Financial Health

How is Challenger's financial position?


Financial Position Analysis

Short Term Liabilities: CGF's short term assets (A$14.9B) exceed its short term liabilities (A$9.3B).

Long Term Liabilities: CGF's short term assets (A$14.9B) do not cover its long term liabilities (A$16.8B).


Debt to Equity History and Analysis

Debt Level: CGF's debt to equity ratio (174.5%) is considered high.

Reducing Debt: CGF's debt to equity ratio has reduced from 233.3% to 174.5% over the past 5 years.

Debt Coverage: CGF's debt is well covered by operating cash flow (38.6%).

Interest Coverage: CGF's interest payments on its debt are well covered by EBIT (3.4x coverage).


Balance Sheet


Dividend

What is Challenger current dividend yield, its reliability and sustainability?

2.96%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CGF's dividend (2.96%) is higher than the bottom 25% of dividend payers in the Australian market (2.23%).

High Dividend: CGF's dividend (2.96%) is low compared to the top 25% of dividend payers in the Australian market (5.32%).


Stability and Growth of Payments

Stable Dividend: CGF's dividend payments have been volatile in the past 10 years.

Growing Dividend: CGF's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (22.7%), CGF's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: CGF's dividends in 3 years are forecast to be covered by earnings (55.9% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure


CEO

Richard Howes

2.75yrs

Tenure

AU$3,573,355

Compensation

Mr. Richard J. Howes has been the Managing Director, Director and Chief Executive Officer of Challenger Ltd. since January 02, 2019. He has been a Director of Financial Services Council Ltd since November...


CEO Compensation Analysis

Compensation vs Market: Richard's total compensation ($USD2.68M) is above average for companies of similar size in the Australian market ($USD1.79M).

Compensation vs Earnings: Richard's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: CGF's management team is considered experienced (2.1 years average tenure).


Board Members

Experienced Board: CGF's board of directors are considered experienced (3.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: CGF insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

Company Information

Challenger Limited's employee growth, exchange listings and data sources


Key Information

  • Name: Challenger Limited
  • Ticker: CGF
  • Exchange: ASX
  • Founded: 1985
  • Industry: Other Diversified Financial Services
  • Sector: Diversified Financials
  • Market Cap: AU$4.717b
  • Shares outstanding: 674.77m
  • Website: https://challenger.com.au

Number of Employees


Location

  • Challenger Limited
  • 5 Martin Place
  • Level 2
  • Sydney
  • New South Wales
  • 2000
  • Australia

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/10/26 07:01
End of Day Share Price2021/10/26 00:00
Earnings2021/06/30
Annual Earnings2021/06/30


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.