The Star Group

Do you hold an opinion on SGR as a growth / income at around current price?

Thank you

A: The Star Group (SGR) wouldn’t be in my list of great growth stocks, mainly because there is a dependence on VIP turnover and in the medium term, the risk of competition from Crown’s new casino at Barangaroo.

That said, this seems to be reflected in the price. All the major broker analysts are positive on the stock, with 8 buys and 0 sells. Target price is $6.11 cw current price of $5.55.

The brokers’ forecast EPS to grow from 23.6c in FY16 to 27.0c in FY17 and to 30.4c in FY18 – and on this basis, it looks like a growth stock.

Income? No, Forecast dividend yield of 2.7% in FY17 rising to 2.9% in FY18.

Regards


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