ASX stock Cash Converters Ltd (ASX: CCV) has delivered its sixth consecutive annual dividend of 2 cents per share, which, at the current share price, equates to a dividend yield of 6.7%.
But the analyst team at Shaw and Partners believes there is also share price upside from here, with a buy rating on the shares and a bullish share price, which I'll get to shortly.
First, let's have a look at Cash Converters' recently released full-year results.
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Profit down in year of transition
The company's net profit fell 20% year-on-year to $19.7 million, on revenue of $429.2 million, up 11%.
The company's gross loan book fell 3% to $236.6 million while cash on hand fell 49% to $37.2 million.
Chief Executive Officer Sam Budiselik said FY26 was a year of change for the company.
He added:
We are pleased to report a full-year result reflecting the deliberate execution of our strategic transformation, including exiting payday lending, materially growing the new Cashies Loan book and substantially expanding our corporate store network. While this transformation has created near-term earnings volatility as the composition of the Group's earnings has changed, we now have a simpler business supported by a broader base of growing retail and international earnings. Following the successful launch of Cashies Loan, the Group has simplified its personal lending offering, improving the customer journey and reducing servicing costs. The Cashies Loan book reflected strong demand closing the year up almost five times at $114.1m ($23.1m at 30 June 2025). The overall quality and composition of the Group's loan portfolio continued to improve, with the Group Net Loss Rate declining to 11.1%, from 16.0% in FY25. Legacy payday loans now comprise only 2.4% of the Group's $236.6m total gross loan book.
Mr Budiselik said the company's store segment delivered strong growth, with operating EBITDA up 49.7% to $46.8 million and same store sales increasing 13%.
The company is also expanding its luxury store concept, with third party AI authentication technology enabling an expansion in the product range.
Shares looking cheap according to broker
Shaw and Partners said in its note to clients that the results were as expected.
They added:
CCV is demonstrating that it can drive synergy and efficiency through corporatisation of its franchised store networks – a key element of our BUY recommendation. Further store acquisitions are signalled for FY27.
Shaw and Partners said the company was trading well below the valuation levels of its international industry peers.
They have a price target of 41 cents on Cash Converters shares compared to 29.5 cents currently.
Cash Converters is valued at $209.9 million.
