HGH - Heartland Group Holdings

[clearasmud]

I hope its SP doesn't start reminding us about the story of two companies ...lol

But jokes apart ...Why its yield not cushioning its fall ...means Mr Market thinks yield is not sustainable ...Is it ?

Falling house prices means less demand for reverse mortgages.
Increasing cost of funds could mean less margin as above 7% a reverse mortgage is becoming too dear.

[bullfrog]

Falling house prices means less demand for reverse mortgages.
Increasing cost of funds could mean less margin as above 7% a reverse mortgage is becoming too dear.

The reverse mortgage angle was a major factor when I initially invested in HGH, rising house prices/locked in equity/low interest rates. But the falling house prices and rising interest rates make the reverse mortgage business less attractive, time to sit on the sidelines for a while.

[percy]

Some of the reasons people take out a reverse mortgage remain.
Pay for a medical procedure.
Home improvements.
World trip.
Help out members of the family.
Buy a new car [electric].

[Bjauck]

The reverse mortgage angle was a major factor when I initially invested in HGH, rising house prices/locked in equity/low interest rates. But the falling house prices and rising interest rates make the reverse mortgage business less attractive, time to sit on the sidelines for a while.

For some perspective, the house price index was:
2615 !/5/2022
2366 1/5/2021
1913 1/5/2020
1771 1/5/2019

Heartland expanded its reverse mortgage business in September 2020, so I guess the house price index could go down to about 1965 (a drop of about 20% from today) and there could still be good business to be had.

https://www.qv.co.nz/price-index/

[Ggcc]

Some of the reasons people take out a reverse mortgage remain.
Pay for a medical procedure.
Home improvements.
World trip.
Help out members of the family.
Buy a new car [electric].

I agree. Not too many problems I see for HGH REL in the longterm. I am already over invested at an average price of around $1.30. I find at this price a great longterm entry point for some. DYOR and not business advice.

It might drop some more next week but I will calmly hold as I am a longterm investor in this share. Great management with skin in the game.

[Muse]

Some of the reasons people take out a reverse mortgage remain.
Pay for a medical procedure.
Home improvements.
World trip.
Help out members of the family.
Buy a new car [electric].

well said.

and in the short term we can't forget with higher cost of living and diminished retirement savings the need for a reverse mortgage may actually increase

[iceman]

well said.

and in the short term we can't forget with higher cost of living and diminished retirement savings the need for a reverse mortgage may actually increase

Agreed. I don’t think a bit of pullback in house prices will negatively affect the REL market. The customers are elderly with huge equity and as percy points out above, seek RELs for various valid reasons. The increasing cost of living could well provide one more reason customers may want to draw down a bit of debt to help themselves, children or grandchildren. HGH’s REL business is strong and I have no concerns about it.
We need to also remember it is only one of many segments HGH is in.
A very happy holder and just added a few more

[alokdhir]

I am torn between HGH and GNE ...both have excellent yields at the moment ...GNE yield seems more secure to me and less dependent on economy ...which surely will be collateral damage in big Inflation fight needed .

My purpose is mainly long term income with moderate capital appreciation as bonus ...will be switching from IFT ...

HGH may have more growth prospects but my highest priority at the moment is security of yield and its long term dependability ....

Any thoughts will be most welcome and appreciated

[Shareguy]

I see both HGH and GNE as great companies and have large positions in both. Currently feel that HGH will go lower as inflation and recession fears loom. GNE getting close to bottom (my opinion) with potential large upside and reasonably secure dividend stream for several years.

[Rawz]

Go GNE 18 months then HGH 4 years. Check back after that