Why does MM prefer HUB over NWL?
Curious as to why you prefer HUB over NWL in this morning’s note. Looking at the business metrics they seem similar except the ROE for NWL is 5x HUB. Could you elaborate why?
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Answer
Hi Alan,
Growth, valuation, management & user experience.
1) Growth: Earnings expected to grow quicker than NWL between FY23-26 – HUB around 27% pa versus NWL at 20% pa
2) Valuation: Cheaper like-for-like PE now and in the outer years given better growth. On consensus numbers, HUB is on 23x FY25e vs NWL at 28x
3) Management: They have a more aggressive commercial model which they have continued to execute on.
4) User experience: We like the HUB platform better and we’re not alone here, in FY22 HUB was awarded best platform, best investment options and best adviser experience in the Adviser Ratings Financial Advice Landscape Report.
