2 ASX shares that are rated as buys by multiple brokers

Monash IVF is one of the ASX shares that brokers like at the moment.

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Brokers are always on the search for ASX share opportunities that may be good ideas to consider.

Businesses are regularly updating the market and conditions are changing. Add in that fact that share prices are changing as well and investors can get the chance to regularly find potential options in different areas.

The two businesses in this article are ones that are liked by multiple brokers:

Monash IVF Group Ltd (ASX: MVF)

Monash IVF describes itself as a leading provider of assisted reproductive services and specialist women’s imaging and diagnostic services in Australia and Malaysia. It is a leading player in the development of new technology in the sector.

Over the last year the Monash IVF share price has risen by around 45%. However, brokers still think that the ASX share is an opportunity.

It’s currently rated by at least three brokers, including Morgans, which has a price target of $1.09 on the business. That suggests the Monash IVF share price could rise by more than 15% over the next 12 months, if the broker is right.

Morgans reckons that Medicare data shows there’s a good level of demand for reproductive services that could mean FY23 is promising.

On Morgans’ numbers, Monash IVF is valued at 13x FY23’s estimated earnings. It could pay a grossed-up dividend yield of 7.4%.

In FY21 the business generated revenue growth of 26.3% to $183.6 million, with Australian stimulated cycles up 36.6% (with Australian stimulated cycle growth of 36.6% and 0.6% market share growth). Ultrasound scan volumes increased 12.9% to 10,623 scans.

Monash IVF experienced rising profitability across the business. Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) increased 37.1% to $47.7 million and adjusted net profit after tax (NPAT) went up 61.5% to $23.3 million – this beat the profit guidance of $21 million to $23 million. It also generated free cashflow of $32.8 million.

The ASX share itself said there has been a fundamental shift as a result of the pandemic, changing people to focus on family, health and wellbeing, with a re-direction towards family extension.

Steadfast Group Ltd (ASX: SDF)

Steadfast describes itself as the largest general insurance broking network and the largest underwriting agency group in Australasia. It provides services to broker businesses across Australia, New Zealand, Asia and London. The ASX share also operates as a co-owner and consolidator through its equity interests in a number of broker businesses, underwriting agencies and other businesses.

It also has a stake in unisonSteadfast, a global general insurance broker network with 264 brokers in 140 countries.

Steadfast is currently rated as a buy by at least three brokers, including Macquarie Group Ltd (ASX: MQG) which has a price target on the business of $5.30. Based on Macquarie’s estimate, Steadfast is valued at 21x FY23’s estimated earnings. It’s expected to pay a grossed-up dividend yield of 4.1% for FY23.

The ASX share recently announced its FY21 result and also completed an acquisition.

It has bought Coverforce, one of the largest privately owned insurance brokers, which is predominately focused on the small and medium enterprise sector. The acquisition price was $411.5 million, funded with a capital raising. Management said this was expected to leverage the expertise and skills across both platforms, whilst also benefiting from increased scale.

In FY21, it generated revenue growth of 8.9% to $899.9 million, whilst underlying net profit surged 20.2% to $130.7 million. This allowed the business to grow its total dividend by 18.8% to 11.4 cents per share.

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Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Steadfast Group Ltd. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool Australia has recommended Steadfast Group Ltd. 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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