UPDATE: DELTA LLOYD

Reiteration: BUY MORE

 

• DL is misunderstood and just too cheap. This is the value in the sector.
• Looking to real capital generation which has been our bull case and one we feel the market does not appreciate at all.
• Subordinated note last Friday moved them over the 200% (self imposed) solvency level which is key to future dividend policy. This will lead to a reduction in the scrip divi which is 4% dilutive to share count every year and a potential increase in the dividend.
• Underlying trends are strong as they continue to take mkt share and dominate the pensions market which is another potential positive catalyst.
• Costs been smashed since 2008 and they are not finished. This will lead to increases in operating leverage.
• Disposal of Belgium bank to come in the next 2 months I am hearing which will add another 15% to solvency.
• Generate 10-15% of mkt cap in cash currently and pays a 5% dividend. Higher payout and share price on the way.
• Stay long/Add for the disposal of Belgium bank and capital returns.

 

 

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Mon, 02 Jun 2014 15:01

Delta Lloyd: 200DMA Bounceola

• Cheap relative to the sector and market.
• However it has had a tough time recently and is unloved.
• It has a lot of positives RoEs are expected to increase to a very healthy 17.2% in ’15, and offering a divi yield of around 5.3%.
• As a name the big story is capital generation which is under appreciated we feel.
• This is a name we like MT and feel this is a good entry point if it holds the 200 mda.
• It has bounced of this level repeatedly in the past and moved on.