Little-known accounting firm aggregator Countplus Ltd (ASX: CUP) has a market capitalisation of just under $200 million and flies under the radar of most investors. With the stock trading near its 52-week low and on a hefty fully franked dividend yield of 6.8%, the company is definitely worth investors' attention.
Countplus listed on the ASX in December 2010 and was previously a subsidiary of financial advisory network Count Financial which was acquired by the Commonwealth Bank of Australia (ASX: CBA) in 2011.
Countplus currently incorporates 21 businesses including 18 accounting/ business advisory firms across Australia. As any business owner or tax payer knows, there is an annual requirement to prepare a tax return and this creates a steady, reliable and recurring revenue stream for Countplus and its shareholders.
One possible explanation for the stock trading near its year low is the shocking performance of listed peer Crowe Horwath Australasia Ltd (ASX: CRH). While this is perhaps understandable on one level, a major differentiator and factor in the success of Countplus is its quality management. The founder of the successful Count Financial, Mr Barry Lambert, is thankfully the chairman of Countplus. In turn the major problems facing Crowe Horwath appear firm specific and therefore don't apply to Countplus which has avoided these problems thanks to good management.
With earnings forecast to rise from 10 cents per share (cps) in FY 2013 to 13 cps in FY 2014 and up to 14cps in FY 2015, a dividend of 12 cps looks well and truly maintainable. With the stock trading on an FY 2015 price-to-earnings ratio and yield of 12.5x and 6.8% now could be a great time for income-seeking investors to add Countplus to their portfolios.
