Should you follow Yellow Brick Road?

The big four banks aren't the only players in town.

a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

In recent weeks, the market has taken a wild ride. The finance sector has been one of the hardest hit with the major banks share prices being stripped away. The Commonwealth Bank of Australia (ASX: CBA) after hitting a bottom price of just $25 in the height of the GFC, was trading at $73 only weeks ago. To date, it is still up 74% on a five-year past performance view. But it's not the only player in the field.

A new kid on the block is Yellow Brick Road Holdings (ASX: YBR), currently trading at $0.52. Founded by Mark Bouris, Yellow Brick Road is a full service wealth management company that offers products and services for home loans, commercial loans, financial planning, insurance, superannuation, investments, accounting and tax.

After securing a deal with Macquarie Group (ASX: MQG) last year, Yellow Brick Road is offering home loans at very competitive rates that beat most of the banks. As of March 2013, Yellow Brick Road has secured around $1.26 billion worth of home loans, and is poised to obtain more in a home loan market worth approximately $1.1 trillion.

In a recent ASX announcement release, the company said, "[Yellow Brick Road] is taking its market leading Empower Home Loan offer one step further, announcing a first year 1.25 per cent discount for all borrowers with a lifetime discount of between 0.86 per cent and 0.91 per cent p.a." With Macquarie as a financial backer and stakeholder, there is room for growth.

Macquarie Group is currently trading at $42.18, down 9.49% on a five-year past performance view, but up 65.61% on a one-year past performance view. Even though Macquarie Group has expanded its home loan book by more than half in the past six months it has also been hit in the recent month, just like all the other banks, down from a height of $47. In my opinion, that's a good buying price.

Foolish takeaway

Mr Bouris and Yellow Brick Road – with the help of Macquarie — are offering mortgage holders the better deals they are after. In a time where it is now easier to refinance, Yellow Brick Road is well-positioned to succeed, and so is Macquarie. Investors would do well to consider adding either company to their watchlists.

The Australian Financial Review says "good quality Australian shares that have a long history of paying dividends are a real alternative to a term deposit." Get "3 Stocks for the Great Dividend Boom" in our special FREE report. Click here now to find out the names, stock symbols, and full research for our three favourite income ideas, all completely free!

More reading


Motley Fool contributor Roberto Galeano does not own shares in any of the companies mentioned in this article.

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »

⏸️ Investing

Why Fox (NASDAQ:FOX) might hurt News Corp (ASX:NWS) shareholders

News Corporation (ASX: NWS) might be facing some existential threats from its American cousins over the riots on 6 January

Read more »