EBOS Group Limited (NZSE:EBO) Shows Strong Fundamentals: Is the Market Misjudging the Stock?
EBOS Group's Stock Performance: EBOS Group's stock has declined by 28% over the past month, but its financials, particularly its return on equity (ROE) of 7.9%, indicate respectable profitability relative to its equity capital.
Comparison with Industry: EBOS Group's ROE is below the industry average of 11%, yet it has achieved a net income growth of 8.7% over the past five years, outperforming the industry growth rate of 6.6%.
Profit Retention and Dividends: The company has a high payout ratio of 78%, retaining only 22% of its profits, which may limit its growth potential; however, it has consistently paid dividends for over ten years.
Future Growth Predictions: Analysts predict that EBOS Group's future ROE will rise to 11%, and the company is expected to maintain its current growth rate, despite its low profit retention.
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