MENU

3 reasons you’re on a winner with SEEK Ltd

Most investors and job seekers these days are familiar with SEEK Ltd (ASX: SEK) thanks to its significant market share of online employment classifieds. What they may not be as aware of is that SEEK is also the world’s largest online employment marketplace by revenue, profits and market capitalisation!

In fact SEEK’s revenue for international online employment classifieds advertising is now on par with its domestic service. The growth of SEEK is a credit to management’s foresight and shareholders have certainly been benefiting. In the past 12 months alone, while the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) has gained a respectable 10.6%, SEEK’s share price has surged 62.3%.

Here are three reasons why SEEK will continue to be a top stock:

1)      Market leader by a country mile

Talk about having a lead! Out of the three online jobs boards in Australia SEEK boats a 70% share of ads. The structural change which has occurred and revenue lost at newspaper firms Fairfax Media Limited (ASX: FXJ) and News Corp (ASX: NWS) doesn’t look to be over either. With around $200 million in job ad spend still with newspapers there is potentially still more revenue to flow SEEK’s way.

2)      Global expansion ambitions

It’s not just domestic dominance either. SEEK has expanded through acquisition into a number of regions around the world including Mexico, South East Asia, Brasil and Africa. In most cases it owns the clear number one jobs board in each market.

Navitas Limited (ASX: NVT) has proven that there is serious money to be made in Education. SEEK hasn’t let this go unnoticed and is positioning itself for a slice of the education market including through partnerships with Deakin University and Swinburne University where it delivers online tertiary courses specifically for working Australians.

3)      Dividends

One of the most appealing aspects to SEEK’s business model is the free cash flows pouring out of the company. Last year the board declared a fully franked dividend of 22 cents per share – a rise of 27% on the prior year. The strong financial position and future growth should mean dividends continue to rise at a double digit rate.

SEEK has had a great run and investors who got in early have enjoyed the biggest gains.

Luckily, it's not too late to get the full scoop on our #1 ASX pick which still has plenty of upside! The Motley Fool has issued a firm "BUY" rating on this small but ultra promising ASX company... and you can get the name and code FREE right now. Click here for your free copy of "The Motley Fool's Top Stock for 2014."

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

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.