S&P/ASX 200 Index (ASX: XJO) stock Steadfast Group Ltd (ASX: SDF) is getting caught up in the broader market retrace today, following on this morning's unwelcome inflation report from the ABS.
Shares in the insurance brokerage company closed yesterday trading for $6.63. In afternoon trade on Wednesday, shares are swapping hands for $6.47 apiece, down 2.5%. This sees the company commanding a market cap of $7.2 billion.
For some context the ASX 200 is down 0.9% at this same time.
Despite today's underperformance, Steadfast shares have outperformed the ASX 200 over the past year, gaining 17.6% compared to the 8.3% one-year gains posted by the benchmark index.
The ASX 200 stock also paid out 19.5 cents a share in fully franked dividends over the full year. At the current share price, that sees Steadfast stock trading on a fully franked dividend yield of 3.0%.
Looking ahead, Sequoia Wealth Management's Peter Day envisions more outperformance to come from Steadfast (courtesy of The Bull).
Here's why.
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ASX 200 stock on the growth path
"Steadfast operates a large general insurance broker network," said Day, who has a buy recommendation on the ASX 200 stock.
The first reason he's bullish on Steadfast shares is the company's international growth prospects.
"It has growing operations in Asia and Europe. It's also expanding into the United States. The ability to maximise returns on a US roll-out is key to SDF's long term value," Day said.
Then there's Steadfast's enviable FY 2025 results, released on 28 August, which included a significant dividend boost.
Day noted:
The company delivered a strong result in fiscal year 2025. Underlying revenue of $1.825 billion was up 8.9% on the prior corresponding period. Underlying net profit after tax of $295.5 million was up 17.2%. The final fully franked dividend of 11.7 cents a share was up 14%.
And if the ASX 200 stock can meet is FY 2026 guidance, it looks well-placed for another year of outperformance.
"The company has guided for underlying net profit after tax to range between $315 million and $325 million in fiscal year 2026," Day said.
That represents potential profit growth in the range of 7% to 10% for the year ahead.
"At current valuations, we retain our outperform recommendation," Day concluded.
A word from Steadfast's CEO
"FY 2025 continued our year-on-year record strong growth in revenue and profit, making it the twelfth consecutive increase since listing in 2013," Steadfast CEO Robert Kelly said on the day of the results release.
He also noted the exceptional gains the ASX 200 stock has delivered to long-term shareholders over the past 12 years.
Kelly said:
This has resulted in a shareholder, who participated in the Steadfast listing and continues to hold their shares, experiencing a total shareholder return of 530.3% on their initial investment.
