Sanlam a preferred Insurance sector stock for Ingham Analytics

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Sanlam a preferred Insurance sector stock for Ingham Analytics

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Published Date: 2019-06-26 | Source: INCE|Community | Author: Mark Ingham

Sanlam a preferred Insurance sector stock for Ingham Analytics

Ingham Analytics rate Sanlam, together with Discovery, as the two preferred stocks in the life insurance sector. Sanlam's income yield is both secure and attractive. Earnings growth in the prevailing economic situation will remain difficult to achieve but earnings quality remains sound. The acquisition of the remaining 53.7% of Saham, effective 9 October 2018, will provide a small boost to earnings and new business volumes for the full twelve months in 2019. The credit life and funeral distribution agreements concluded with Capitec in 2018 will further assist volumes.

Investors gain indirect exposure to Santam, the largest short-term insurer in South Africa. The stock price is fairly pitched, having recovered from a level under R70 in the past year. We see further upside potential provided there are no earnings disappointments out of Saham, on which data is a little light. We set out the pros and cons in the note.

Click here to get the Ingham Analytics Sanlam note and the insightful analysis of the investment opportunity and risks.



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