What does 2017 hold for QBE Insurance Group Ltd?

It turns out that September last year might have been the perfect time to buy QBE Insurance Group Ltd (ASX: QBE) shares.

QBE’s share price plunged to a 10-year low of $9.88 last year following another underwhelming half-year report, before recovering swiftly to over $12 per share after recording a second half that surprised most and provided an insight into the profitable and successful company it could be.

Looking to 2017

Now that we’re nearly halfway through QBE’s 2017 financial year (they operate their financial year as the calendar year) we need to start looking ahead to the half and full-year reports in August and February next year.

What should we expect?

The mean forecast of the analysts that research the company expect that QBE will report half-year results that put it in on target to hit full year results of:

  • Net profit of $818m (down from $844m in 2016)
  • Earnings per share of 61 cents (down from 64 cents)
  • Dividend per share of 44 cents (down from 40 cents)

These number don’t sound particularly exciting, however investors should remember that QBE managed to beat low expectations last year and analysts are likely being conservative after years of disappointment from QBE.

For what it’s worth, analysts are far more optimistic two years out. For 2018 they predict:

  • Net profit of $1038m
  • Earnings per share of 78 cents
  • Dividend per share of 51 cents

That would put QBE on a forward dividend yield of nearly 4% fully franked!

Is it time to buy?

It would take a highly optimistic investors to put their faith in QBE actually hitting what they expect to after nearly a decade of under-performing.


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Motley Fool contributor Andrew Mudie owns shares of QBE Insurance Group Ltd. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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