IPH Limited

ASX:IPH

IPH Limited

ASX:IPH
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$3.21 (-0.9%)
Last close price
#415
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2
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Reports (2) My Report Forum Investors
Forum Topics IPH IPH 18% return on zero growth?

Pinned straw:
Rick
Last edited a month ago

IPH is trading down 7% today, following a strong uplift yesterday. I’ve been loading up IRL today, and I hope to on SM if the trades go through.

The last time I found an opportunity like this was when banks were on the nose in late 2023, and all the brokers had a sell on them. Westpac was trading at just over $20 per share and I loaded up IRL. I posted a straw back then titled “14% return on zero growth” https://strawman.com/reports/WBC/all

It turns out that if I’d actually held WBC through until now I would have more than doubled that investment including the fully franked dividends. However, I still hold NAB and CBA IRL which I’m selling slowly at ridiculously high valuations. The only reason I still hold banks is the crazy chart! Mr Market is loopy!

I think I’ve found another opportunity in IPH. This time 18% gross yield in 13 months. That’s based on three dividends of approx 19 cps franked at 20%. IPH goes ex-div in 6 days (26/02/26). IPH is spewing cash at the moment and I expect this will continue for a few years to come.

Assuming the share price didn’t move for 13 months, a dividend return of 18% (including franking credits) looks attractive.

I think the IPH fundamentals will also improve over the next few years and I expect the share price to move higher also. The shares look cheap to me.

It’s a risk and it’s not a strategy for everyone. For me the risk/reward looks highly attractive, especially following a reasonable 1H26 result.

Held IRL (6.6%) Accumulating under $3.55 with proceeds from BHP and NAB.
Rocket6
Added a month ago

Hi @Rick. What are your thoughts re: drivers over the next few years?

I agree a trailing div yield of around 9-10% is attractive, provided this is sustainable and the business isn't effectively dying a slow death (extreme, but a risk). I note the recent profit bump was driven by lowering costs and synergies from the recent acquisition, but revenue half vs half was effectively flat.

Asia growth was very small (3.5%), with ANZ declining again. I suppose with the recent acquisition wrapping up and cost synergies being realised, there is a concern there aren't too many more levels they can pull?

Do you also have any thoughts on the CEO transition?


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Rick
Added a month ago

@Rocket6 I don’t see IPH shooting the lights out. They are struggling with the ANZ business for unknown reasons, however the Canadian acquisitions are doing quite well and have some organic growth to come. Most revenue will be coming from Canada over the next few years. The ANZ issues are likely cyclical, but I’m not sure about this. The trend is concerning,

I don’t have views on the new CEO transition. It’s always a risk. I hope it’s not another CSL strategy…like leave the issues to the next guy!

I’m not the greatest salesman am I? I do believe IPH will continue to generate good cash flows for a number of years to come, and the share price would need to fall a further 57 cps (down to $3.00) to be worse off after the dividends. Of course that’s possible, but I don’t think it’s probable.

Enter at your own risk!

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