Insurance broker network Steadfast has been wacked by the AI bat almost as much as SAAS companies and currently sits at a PE of 12 per CommSec (14.4 if you double H1 results & FY26 outlook), having had a PE consistently over 20 for the last 10 years virtually without fail and still showing solid growth (6-10% EPS growth outlook for FY26).

I have followed Steadfast loosely for almost 10 years, never taking the plunge on the basis that the price lacked a safety margin, so was reasonable but no real risk/reward edge. The business is a great model, with incentives for the brokers well aligned unlike most service or sales companies which are better set up as partnerships than listed companies.

As such I dipped my toe in with a small position a week ago to provide some diversity in my portfolio and a nice little dividend stream. The H1 results continue to show it to be a reliable and resilient business, combining organic and acquisition growth in a balanced and consistent way aligned with the business model.

H1 Results:

• GWP up $1.6b (+3.0%), Underlying Revenue up $1.0b (+14.6%)
• Underlying EPS 12.4cps (+6.9%), NPAT $161.5m (+6.3%)
• Interim dividend 8.2cps FF (+5.1%)

I expect the current result is indicative of ongoing performance, a combination of low single digit volume increases combined with low single digit price increases for a 6-10% growth rate for a long time.

I am looking for capital growth as the company re-rates towards a PE of 20 when the AI hype is blown over, in the mean time I am happy sitting on a low risk yield of ~6% (inc FC). A PE at 25+ would be a good exit point all other things being equal.

Disc: I own RL