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Post Budget fallout for Link Administration Holdings Ltd

Disappointing results

Link Administration Holdings Ltd’s (ASX: LNK) shares are down 6% to $7.45 at the time of writing due to a report released by the company indicating that the Federal Budget’s proposed changes to the treatment of inactive superannuation accounts are likely to impact revenues. The changes will mean that accounts of less than $6,000 not receiving contributions for 13 months, will be transferred to the Australian Tax Office. Link has advised that this could reduce revenues due to a lower number of accounts being administered, although at this time the extent is not known.

Link Administration, a technological administer of outsourced superannuation, is trading on a forward price-earnings- ratio (PER) of 20x and is paying an annual dividend yield of 2%.

Computershare Limited (ASX: CPU), which is in the same sector as Link Administration, is trading on a forward PER of 18x with the share price up 22% in a year.

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Motley Fool contributor Rosemary Steinfort has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Computershare. 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 Scott Phillips.

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