Shares in FleetPartners Group Ltd (ASX: FPR) have been on the up since the company released its first-half results recently, but the analysts at Macquarie believe there are still two good reasons to buy the stock.
Those reasons are the potential for more capital gains, along with very healthy dividends, now and into the future.
We'll go into more detail about where Macquarie sees both heading shortly.
Firstly, let's have a look at what FleetPartners reported last week.
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Solid operating result
The vehicle leasing and fleet management company said in its statement to the ASX that its first half statutory net profit for the six months ending March 31 was up 7% on the previous corresponding period to $37.1 million.
The group delivered new business writings of $367 million for the half, down 1%, however the company said momentum was strong towards the end of the half, while the April figures were 27% higher than the monthly average for the first half.
FleetPartners said it had $4.5 million in net cash at the end of the half and no debt maturing until October 2028.
The company said it remained focused on its three main target markets:
In Large Fleets, the Group's value proposition and go-to-market strategy continue to resonate, underpinned by a customer partnership model that combines deep relationships, market-leading service and specialist expertise. In Small Fleets, our strategy remains centred around omni-channel distribution, with strong success in digital direct channels validating the scale of the addressable opportunity. In Novated, recent strategic initiatives, in conjunction with market demand for BEVs, have supported increased enquiry and order volumes in 2Q26. This has been complemented by the acquisition of Remunerator, which is performing in line with expectations. The Group is focused on increasing employer engagement and eligible employee penetration.
FleetPartners announced a $20 million share buyback on March 26, with just $900,000 worth of shares repurchased to date.
It also declared a fully-franked interim dividend of 11.9 cents per share payable on June 1, which represented a grossed-up yield of 13% at the time of publication.
On the outlook, the company said market conditions were challenging, and it expected "marginal growth" in new business writings.
Shares looking cheap
The analyst team at Macquarie ran the ruler over the FleetPartners result, and they liked what they saw.
They said the company was trading at an "undemanding multiple", and they have a price target of $3.41 on the company's shares compared with $2.87 currently.
On the dividend front, Macquarie is forecasting a dividend yield of 8.3% this financial year, followed by 8% and 7.5% the following years.
FleetPartners is valued at $601.5 million.
