Originally Posted by
Fiordland Moose
I don't know why Forbar have their nickers in such a twist re Heartland. Sure it's price to book is at a slight premium to most of the Australian banks, but its well known that the single biggest driver of price to book is return on equity, where Heartland shines. It's PE is below its peers and has a superior dividend yield.
See heartland valuation (red dot) vs. its Australian peers below:
If anything the analysis suggests Heartland is undervalued relative to its peers (heartland consistently below trendline on a price to book and PE basis). I'd say some discount is warranted given Heartlands smaller size, its evolution from an amalgamation of non bank lenders and eventual registered bank status, and mix of receivables but I certainly don't agree with Forbar that it is overvalued relative to its peers.