Osb Share Discussion Threads

[rcturner2] 14/5/2023 08:36

Brucie, I always calculate the yield myself as the way stocko presents the numbers means they tend to headline with future figures.

OSB's last full year dividend was 30.5p which is a yield of 6.14%.

[brucie5] 13/5/2023 12:36

I would certainly see this at 5.50 on the chart, though there's a declining range of peaks. Obviously doesn't affect the value case.

From Stocko- so can be misleading especially on the yield!

PE Ratio (f)
4.9
PEG Ratio (f)
0.9
EPS Growth (f)
6.0%
Dividend Yield (f)
8.34%

[thebutler] 03/5/2023 07:36

Great update imo, and a steal at 500p whilst the Market continues to shun the banks.

[rcturner2] 03/5/2023 07:05

Decent trading update from OSB today for Q1. Raised full year guidance.

[apple53] 23/3/2023 11:31

Not sure it's any cheaper than yesterday, but thanks for pointing out it's ex-d!!

[petewy] 23/3/2023 10:27

Good point

[jonnybig] 23/3/2023 09:01

Time for osb to hoover up all the cheap ex div stock.

[apple53] 17/3/2023 01:24

Has been a growth stock for ages, but never got a growth multiple (ie 15x!). Maybe it's not a growth stock any more - loan growth guidance suggests zero real growth. Meanwhile, 2022 hiring will hit fully in 2023 and put CIR at 29% (expected), higher than I can remember, but still ridiculously low meaning earnings are extremely resilient against (credit) shocks.
Even if not a growth stock it is surely worth a US regional bank multiple (10-12x I guess but maybe a bit lower now).
Really pleased to see them beginning to build up provisions despite not actually needing them (yet) as it was always a criticism that earnings were overstated due to low/zero/negative credit charge.

The buybacks are sustainable for years, especially with lower loan growth.

I can't remember if they did them too quickly last time. I should check.

I switched some STB in to an already large position at £5 (when STB £8), but not enough. Also switched some STB to IQE, more fool me.
I have learnt to 'trade' OSB, but want to be disciplined and wait for £6 before seeing if there is anything more attractive.

[jonnybig] 16/3/2023 09:57

Top on ftse riser list. Great stuff but still ridiculously cheap with a p/e well under 10 despite strong continued growth.

[curriedquaker] 16/3/2023 08:46

Special dividend of 11.7p on top of the 21.8 p makes an attractive 33.5p to be paid in May on top of the £150m share repurchase.

[onjohn] 16/3/2023 08:00

bad debt roofing it

nderlying loan loss ratio of 14bps and statutory loan loss ratios of
13bps (2021: -2bps) reflected the worsening economic outlook, including
the potential impact of higher cost of living and borrowing on
affordability.

[t-trader] 16/3/2023 07:58

Yes great results and your probably right jonnybig…̷0;may top up if it does go down

[jonnybig] 16/3/2023 07:56

Excellent results. Probably will still fall though in this insane market.

[petewy] 27/1/2023 19:56

Yes banks were featured in the IC Lloyds etc but no mention of OSB and ARBB

[riverman77] 27/1/2023 17:37

OSB is one I hold in the background but don't tend to pay too much attention to it - pleasantly surprised to see how much it has shot up recently, but still seems to be on a cheap valuation (around 6x forecast earnings according to Stockopedia, and just above book value).

[apple53] 27/1/2023 11:13

thanks for highlighting that. I was wondering why the move, despite recent grinding upwards. Metro has been moving also, and Virgin had got ahead a bit.
STB not moving....

[thamestrader] 27/1/2023 10:10

looking nice.
PAG had a decent update today, maybe a read across to here?

[aishah] 03/11/2022 11:19

Talintyre sold 150k@604.5p back in April. Directors have cashed out approx. 50% of their exercised options throughout this year.

[future financier] 03/11/2022 08:52

Haven't seen the the MW article - but forget the "specialist residential" - BTL is > 90% of the loan book. Historically BTL has had a lower default rate than residential so whilst there will undoubtedly be an uplift in impairments this should not be too heavy. My only concern is that this will be the first time that OSB has been exposed to stormy market conditions so, unlike PAG, we do not know how effectively they will perform.

[masurenguy] 03/11/2022 07:17

OSB (LSE: OSB) is a lender specialising in professional buy-to-let and residential mortgages. The group is one of a handful of so-called challenger banks that emerged after the financial crisis. With a market capitalisation of around £1.8bn, it is relatively small compared to the big high street banks, which means it tends to fly under the radar of most investors. Its size has not held it back. Since 2016, the group’s loan book and value of customer deposits have nearly quadrupled in size. Meanwhile, operating profit has increased from £163m in 2016 to £465m.

As profits have grown, OSB has been able to return more cash to investors. Its dividend per share more than doubled between 2016 and 2021 and is expected to hit 35p in 2023, giving a projected dividend yield of 8.3% on the current share price. Shares in OSB are also selling at what appears to be a dirt-cheap multiple of just 4.5 times forward earnings and a price/book (p/b) ratio of below one.

The stock has been under pressure recently following the now-defunct mini-Budget at the end of September. As a specialist mortgage lender, OSB is highly exposed to higher mortgage rates and possible defaults if borrowers are struggling to meet their repayments. It seems likely the business will have to deal with loan losses as interest rates rise, but it should also benefit from higher interest rates.

The company reported a net interest margin (the difference between the rate it pays to depositors and charges borrowers) of 302 basis points in the first half of 2022, up from 268 basis points in the same period last year. As this margin expands, it should feed through into OSB’s bottom line. On top of its rising profit margins, OSB also has a healthy balance sheet with a tier 1 equity capital ratio (a measure of banking solvency) of 18.9%. That’s far above the regulatory and industry minimum which averages the low double-digits. As dividend stocks go, OSB appears to tick all the boxes."

Moneyweek: 2 November 2022

[pj84] 15/8/2022 21:38

Shore Capital: OSB valuation is ‘inappropriate’
Shares in challenger bank OSB (OSB) are ‘materially undervalued’, according to broker Shore Capital.

Analyst Gary Greenwood retained his ‘buy’ recommendation and 800p ‘fair value’ target price on the group previously known as OneSavings Bank, which was trading 2.1% higher at 589p on Friday afternoon.

The group reported rising profit growth in the first half of the year, boosted by rising interest rates and a growing loan book.
‘OSB shares are broadly unchanged year-to-date and currently sit 10% off their 12-month high,’ said Greenwood.

‘Our current fair value of 800p offers 46% upside to the current share price. OSB is a very solid business that is delivering a sector-leading return on equity despite being extremely well capitalised. In this regard, we view the current stock rating as being totally inappropriate with the shares materially undervalued at the current level.’

Greenwood added that management acknowledged the uncertain outlook but is ‘confident in the prospects for the group nonetheless’.

[km18] 15/8/2022 15:09

OSB Group encompasses departments focused on mortgage lending, residential development, funding lines and asset finance. As a result, the firm developed multiple sources of income, hence enabling profit after tax to be forced up to £208.9m in 2022 from £161.5m. The surge in profitability was explained by the organic growth in loan order book, resulting in a higher net interest margin of 302bps, above the 268bps produced last year. Subsequently, equity leapt to £2,093.7m from £1,775m in prior year caused by higher retail deposits. Furthermore, net cash significantly soared to £276.2m from (£166.7m), signifying that the firm funded operating, investing and financing activities effectively. This plausible supporting evidence was efficiently incorporated into the firm’s EV/EBITDA of 17x, thus capturing intrinsic value. The cash hike was simultaneously reflected on the solid P/B of 1.28x, above peers. Given the equity spike, a conservative dividend policy was implemented to reward shareholders for their initial capital invested, illustrated by the robust dividend yield of 5.39%. Despite favourable financial prospects, the security is undervalued, shown by the relatively low P/E of 6.5x, below the financial sector P/E of 17x, hence the stock is expected to surge in value.

Brief Analysis:

Profit after tax of £208.9m, above last year.
Net cash of £1775, rallied from prior period.
EV/EBITDA of 17x, higher than sector benchmark.
P/E of 6.5x, below industry threshold.
Dividend yield of 6.5x, higher than last year.
Interest rate margin of 302bps, above last year...

...from WealthOracleAM

[petewy] 11/8/2022 09:48

Good set of results

[apple53] 30/5/2022 17:40

So if I can raise some more cash (eg if some of my dogs can recover a bit) do I buy more OSB or STB? #

Looks to me like OSB has repurchased about 5m out of c. 18m shares. The 18m estimate assumes average price c. 556p.

Strangely, on a glance at a few sample days, it looks like they were buying more shares per day at higher prices (eg 570p), but hopefully that's just unlucky sampling.

They seem to be buying about 10% of the visible market volume.

At the pace so far they can keep this up til at least the end of the year, while based on the smaller repurchases of the last few days they could do it for years. Someone needs to ask the company about this. Are they getting cold feet and hoping to find an excuse to keep the capital?