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Mystate Ltd (MYS) a bank with solid dividend yield!

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Question asked 03/10/2025

Mystate Ltd (MYS) a bank with solid dividend yield!

Would appreciate your thoughts on this smaller bank with a good income return. MyState is viewed as an attractive income stock for investors, with a high fully franked yield, with dividend growth expected to be above that of peer-group banks and small-cap stocks in general over the next three years. MYS paid a full-year fully franked dividend of 21.5 cents in FY25, and analysts expect steady growth, to 23 cents a share in the current financial year, and then to 27.2 cents a share in FY27. At the current share price of $4.17, that equates to highly appealing expected grossed-up yields of 7.9% in FY26 and 9.3% in FY27. Cheers Craig

Answer

Hi Craig,

MYS is a $740mn Tasmanian based credit union which offers products such as savings accounts, term deposits, home loans, personal / commercial lending, and insurance. Mortgage lending and net interest income from banking operations are where MyState makes most of its money. Wealth management is secondary but expanding.

Similar to the regional banks, MYS net interest margin (NIM) is well below the “Big Four” reflecting its smaller scale, higher funding costs, and different business mix – in FY25 MYS NIM was 1.45% compared to an average 1.8% for the “Big Four”.

Over the next 12-months MYS is forecast to yield 5% compared to ANZ ~4.9% – both fully franked.
Moving forward towards 2030 Bloomberg has MYS yield flat while ANZs is increasing slowly.

We believe both will deliver a healthy yield over the coming year (s), but we prefer ANZ as it has more of a ‘self help’ story playing out.

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Mystate Ltd (MYS)

LAST UPDATED 02/10/2025 16:09

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