This stock is up 1,140% since 2008

This stock is up 1,140% since 2008, but still looks to be a good bet for investors today.

| More on:
a woman

Sometimes the ugliest businesses are the best performing.

Take “receivables management” company Credit Corp (ASX: CCP). The company’s core business, per that euphemism, is to buy overdue consumer debt and then try to collect on it. Credit Corp isn’t alone in this space — smaller competitor Collection House (ASX: CLH) does much the same thing – but it’s arguably Australia’s dominant play on this line of business.

A 1,140% return in five years

You might be inclined to feel squeamish and look away, but first, consider Credit Corp shares’ returns. The company’s stock is up a stunning 1,140% in the last five years, not including dividends, compared with a meager 5% return in the S&P/ASX 200 index (Index: ^AXJO) (ASX: XJO). This is down to not only the profitable nature of the business but also to a deeply discounted share price circa 2008.

Of course, the question for investors today is whether Credit Corp can succeed in the future – whether the company can keep growing.

And the answer looks to be yes. Credit Corp has recently expanded into the comparatively massive receivables management market in the U.S. Despite some short term uncertainty in this new line of business, the long term future should be positive, considering Credit Corp’s conservative approach to the expansion and its expertise in the field.

The company has also expanded into the consumer-loans business in Australia. The loan book is already nearly $19 million, and the company reports that it has additional related products in “pilot” mode that are seeing solid results.

The takeaway for Foolish investors

On the promise of these new business lines as well as the strength of Credit Corp’s core business, the company’s shares should beat the market over the medium and long term. That such a promising company is still so underfollowed helps create the opportunity – Credit Corp shares are no retail investor favourite, and trade for just over 14 times earnings while paying a fully franked dividend with a yield in the 3.7% range.

If you’re in the market for another great investment idea, don’t miss this! Discover The Motley Fool’s favourite income idea for 2013-2014 in our brand-new, FREE research report, including a full investment analysis! Simply click here for your FREE copy of “The Motley Fool’s Top Dividend Stock for 2013-2014.”

More reading

Motley Fool writer/analyst Catherine Baab-Muguira owns no shares in any company mentioned in this article.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of January 12th 2022

More on ⏸️ Investing

Close up of baby looking puzzled
Retail Shares

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

The share price of ASX infant products retailer Baby Bunting Group Ltd (ASX:BBN) has been a solid performer so far …

Read more »

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

3 ASX ETFs that invest in companies fighting climate change

A new landmark report by the Intergovernmental Panel on Climate Change (IPCC) was released earlier this week. It provided a …

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 Limited (ASX: AMS) share price has been on a tear this past week, rising 15% on the back …

Read more »

asx share price competitions represented by businessmen arm wrestling
Retail Shares

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

Online furniture retailer Temple & Webster Group Ltd (ASX: TPW) had a breakout year in 2020, moving from relative obscurity …

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

Shares in ASX healthcare company Polynovo Limited (ASX: PNV) almost doubled in price last year. And, despite a shaky start …

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

Investing in other geographic markets has become a popular way to diversify a portfolio. The risks associated with being exposed …

Read more »

person reading news on mobile phone
⏸️ Investing

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

Despite the News Corporation (ASX: NWS) share price getting a 31% bump between November last year and today, News Corp …

Read more »