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Dividend payday: Is the HUB24 share price in the buy zone?

Investors in HUB24 Limited (ASX: HUB) will today receive their 2 cents per share (cps) dividend – so is it worth reinvesting in HUB24 or should you look at some of its peers?

The case for HUB24

The HUB24 share price is up 26.8% so far this year and remains a leader in the wealth management software space.

It hasn’t all been smooth sailing for HUB in 2019 though with the share price plunging as much as 7.5% in one day back in mid-March after its disclosures indicated that a non-executive director had sold 275,000 shares on-market in the week prior.

Following S&P’s quarterly index rebalancing, HUB24 entered the S&P/ASX200 Index (ASX: XJO) constituents in March which also saw its share price climb higher on expectations of greater coverage and trading volume.

What about investing in one of HUB24’s competitors?

The Praemium Limited (ASX: PPS) share price crashed 14.3% lower on Monday after announcing the loss of ANZ Private as a client, one which had accounted for 8% of the company’s annual earnings.

It was of little surprise that Netwealth Group Ltd (ASX: NWL) was subsequently chosen as ANZ Private’s preferred supplier, and the Netwealth share price has continued its upward trajectory to be more than 19% higher this year.

Netwealth said its platform will provide ANZ Private with a multi-asset, multi-currency investment offering including discretionary managed portfolios, domestic and international equities and bonds, domestic managed funds, term deposits and foreign currency.

Given both Netwealth and HUB24 are bigger and more established players in this space, you’d expect to see greater growth opportunities from Praemium but that hasn’t been the case in the last 6 months.

While Netwealth and HUB24 investors have enjoyed solid capital gains, Praemium investors have watched as the share price has tanked from $1.15 per share in September to just $0.44 per share at yesterday’s close.

For those who want a more high-risk, high-return play in their portfolio, this buy-rated stock in a booming industry could be in the buy basket.

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Lachlan Hall has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Hub24 Ltd and Praemium Limited. The Motley Fool Australia owns shares of Netwealth. The Motley Fool Australia has recommended Hub24 Ltd and Praemium Limited. 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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