Helia Group Ltd (ASX: HLI) is a dividend stock boasting a generous yield more than 5%.
The company engages in the provision of lenders mortgage insurance. It is also involved in the residential mortgage policy development with the lending institutions, local and international regulators and government and industry bodies.
Lenders Mortgage Insurance (LMI) in Australia is insurance that protects the lender (not the borrower) in case the borrower can't repay their home loan.
It is usually required when a borrower has a deposit of less than 20% of the property's value.
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Earnings results
Helia today reported its financial results for the half year ended 30 June 2025 (1H25).
According to the report, statutory net profit after tax (NPAT) was up 38% on the prior corresponding period (pcp) to $133.7 million. Underlying NPAT was up 18% on pcp to $126.1 million.
The Helia Board has declared a fully franked interim ordinary dividend of 16.0 cents per share. The company also declared and an unfranked interim special dividend of 27.0 cents per share.
Helia Interim Chief Executive Officer, Mr Michael Cant, said the strong financial performance and capital position continue to provide the strength and security to support our customers, while rewarding our shareholders.
In 1H25, the Company helped over 13,000 Australians achieve home ownership, continuing the crucial role that Helia has played for first home buyers, upgraders and property investors since 1965.
This dividend stock rose 1.78% on the back of this earnings news.
Outlook and FY25 guidance
The company also released FY26 guidance.
According to the company, FY25 Insurance revenue is expected to be within a range of $350 million to $390 million. The previous guidance was $310 million to $390 million.
FY25 total incurred claims are expected to be negative and remain well below Helia's historical experience of a through the cycle total incurred claims ratio of approximately 30%.
The company said while the 1H25 financial results were strong, it is facing challenges on the outlook for new business.
The Federal Government announced a proposed expansion of the Home Guarantee Scheme (HGS). The company said this is likely to result in the vast majority of owner occupier First Home Buyers (FHB) using the HGS from FY26.
This expansion is on top of the significant impact that the HGS has already had on the LMI industry. FHB represented 25-30% of Helia's GWP in 1H25.
The Company believes that these policy changes are unlikely to sustainably improve levels of home ownership for FHB and introduce risks to Government finances and the stability of the Australian financial sector.
