QBE
International insurer and reinsurer QBE offers one of Australia’s widest product ranges. It offers all major lines of general insurance to cover personal and commercial risks.
Products include home and contents insurance, auto and travel insurance, as well as commercial insurance coverage for everything from cargo ships to wineries. Internationally, QBE provides protection for a wide range of assets, including airports, airline fleets, container ports and construction activities.
QBE saw strong written premium growth in 1Q22, up 19% from the prior corresponding period. Group-wide renewal rate increases averaged 7.9% for the quarter. Despite several natural disasters and significant geopolitical events, QBE has shown resilience in a turbulent operating environment. The insurer has recorded net profit after tax (NPAT) $750 million in calendar year 2021 as prices remain strong across all regions.
Key indicators (as of July 31, 2022):
- Market cap: $17.6 billion
- Average daily volume: 3.6 million
- Headquarters: Sydney, Australia
ASX
ASX is the company behind the Australian Securities Exchange. It acts as a market operator, clearing house and facilitator of payment systems. ASX offers listing, trading, clearing, settlement, technology, data and post-trade services.
The company operates markets for various asset classes, including equities, fixed income, commodities and energy. It ensures compliance with market operating rules, promoting high standards of corporate governance among listed companies. ASX also helps educate retail investors.
During the six months ended December 31, 2021, ASX announced an NPAT of $250 million, an increase of 3.5%. Earnings per share (EPS) and interim dividend increased in line with earnings. Operating revenue rose 6.6% to $501 million, driven by a record halving for capital increaseswith the highest number of announcements since 1H08.
ASX continues to focus on modernizing and upgrading its technology to strengthen the quality of its infrastructure and reduce operational risk. The company believes it is well placed to serve the Australian financial markets and is committed to building an exchange for the future.
Key indicators (as of July 31, 2022):
- Market cap: $16.8 billion
- Average daily volume: 370,375
- Headquarters: Sydney, Australia
Australia Insurance Group
Australia and New Zealand’s largest general insurance company, Insurance Australia Group is home to some of the region’s most trusted and respected insurance brands. It offers a wide range of general insurance products to protect homes, lifestyles and businesses. Its core businesses underwrite more than $12.5 billion in insurance premiums annually under brands such as RACV, NRMA and CGU.
The insurer recently announced its preliminary results for FY22, with NPAT expected to reach $347 million from a loss of $427 million in FY21. Preliminary results reflect positive momentum with growth in key segments despite the challenges of the external environment. IAG reported strong momentum in underlying business performance, providing confidence in the outlook for FY23.
Key indicators (as of July 31, 2022):
- Market cap: $11.1 billion
- Average daily volume: 6.8 million
- Headquarters: Sydney, Australia
Netwealth
This financial services and technology company provides products and services to Australian investors and the financial planning industry. It offers a range of portfolio administration, superannuation, retirement, investment and managed accounts for investors, financial advisors, private clients and high net worth companies. Founded in 1999, Netwealth is one of Australia’s fastest growing wealth management companies and offers best in class technology.
Netwealth saw record annual inflows of $13 billion in the June quarter of 2022, up 32% from a year earlier. Funds under administration were $55.7 billion as of June 30, 2022, despite a negative market movement of $4.5 billion. Funds under management were $13.1 billion, with net inflows of $0.4 billion for the June quarter.
Netwealth reports that its pipeline and success rate for new business remains very strong in all key market segments. It has high levels of recurring revenue and a strong earnings before interest, taxes, depreciation and amortization (EBITDA) margin, with low capital expenditure. Additionally, Netwealth is debt free and has ample cash reserves.
Key indicators (as of July 31, 2022):
- Market cap: $3.02 billion
- Average daily volume: 312,655
- Headquarters: Melbourne, Australia
Hub24
Hub24 provides an integrated platform, technology and data solutions to the wealth management industry. Its platforms provide financial advisors and their clients with managed portfolio solutions as well as enhanced transaction and reporting functionality.
With one of the fastest growing platforms on the market, Hub24 provides innovative product solutions that create value for financial advisors and their clients. The company is focused on leveraging data and technology to provide solutions to challenges faced by investment dealers, financial services licensees and financial advisors.
During the June 2022 quarter, Hub24 recorded record annual net inflows to its platform of $11.7 billion, an increase of 31.7% over the previous corresponding period. Average monthly net inflows for FY22 were $0.98 billion, with funds under management of $65.6 billion as of June 30, 2022.
Hub24 reports that its flexible approach to helping advisors create efficiencies has resulted in a strong pipeline of new opportunities across all customer segments. The total number of advisers using the platform is 3,486 as of June 30, 2022, up 13.8% compared to the previous corresponding period.
Key indicators (as of July 31, 2022):
- Market cap: $1.94 billion
- Average daily volume: 250,182
- Headquarters: Sydney, Australia
Are ASX Financial Stocks Right For You?
ASX financial stocks can provide an investor with valuable diversification earnings, dividends and the potential for capital growth. However, whether ASX financial stocks are right for you will depend on your financial situation and risk tolerance.
Financial stocks tend to be cyclical, with performance varying with economic cycles. For this reason, ASX financial stocks may be more suitable for an investor with a longer time horizon. This provides time to ride out economic downturns and take advantage of subsequent periods of growth.
Before making an investment decision on any financial product, you should consider the advice of your financial adviser (if any) or seek professional advice if necessary.
