Morningstar runs the numbers

We take a numerical look through this week's Morningstar research. Plus, our most popular articles and videos for the week ended 9 August.

Lex Hall

12 August 2019

We take a numerical look through this week's Morningstar research. Plus, our most popular articles and videos for the week ended 9 August.

$80

That’s Morningstar’s unchanged fair value estimate for the Commonwealth Bank. Despite reporting a 4.7 per cent hit to profit last week, Australia’s largest lender remains fairly valued, says Morningstar analyst Nathan Zaia, who remains positive on the bank’s outlook, citing a robust balance sheet, dominant market positions, strong profitability, organic capital generation, sound loan book and high returns on equity.

2.8 million

The film and TV streaming giant Netflix reported that many subscribers in the past three months - it had, however, expected 4.8 million. Its share price dropped after it latest earnings were released but is still up on the year to date from $267 to $335 at the end of July, writes Morningstar’s James Gard. Morningstar analysts remain steadfast in their view that Netflix is overvalued, assigning a $135 fair value estimate to the stock, against a current price of $335.

6 to 9 per cent

In a world of historically low rates, that’s the dividend range the following companies are offering, according to a search using Morningstar’s stock screener tool, writes Lex Hall. Perpetual, Janus Henderson Group, Pendal, Westpac, Pendal, Platinum Asset Management, National Australia Bank, Vicinity Centres, Adelaide Brighton, Spark New Zealand, AMP (although, AMP has declared it won’t pay a dividend).

7.37

The return The Montgomery Fund has yielded over the past five years. This trails both its category peers (10.50 per cent) and the benchmark S&P/ASX300 index (9.18 per cent). The fund charges a management fee of 1.36 per cent a year and a performance fee of 15.38 per cent over the benchmark. which are too high, according to Morningstar analyst Matt Wilkinson, who has downgraded the fund to negative.

US$1.1 trillion

The amount of US Treasuries China is sitting on. With yields tumbling, capital gains would be significant, writes Peter Warnes. “While China has been modestly reducing its holdings, more aggressive selling could see yields on US Treasuries turn, as the Fed is easing monetary policy, throwing financial markets into a greater degree of disarray. This is an unlikely scenario as China is in for the long haul and will want to retain a large base of foreign reserves in deeply liquid markets.”