Insights

How does the HUB24 (ASX:HUB) earnings compare to Netwealth?

Shares in these Aussie wealth managers moved significantly after their respective results.
The post How does the HUB24 (ASX:HUB) earnings compare to Netwealth? appeared first on The Motley Fool Australia. –

The HUB24 Ltd (ASX: HUB) earnings result has lit a fire under the investment advice company’s share price. HUB24 shares rocketed more than 8% higher on Tuesday after the company announced a 53% jump in full-year profits.

Investors may be curious how today’s strong earnings result compares to some of HUB24’s peers. Let’s take a look at how it stacks up against rival platform provider Netwealth Group Ltd (ASX: NWL).

How do the HUB24 earnings compare to Netwealth?

In case you missed it, here are a few of the key takeaways from HUB24’s Tuesday update:

Revenue up 34.4% on FY2020 to $110 million
Underlying earnings before interest, tax, depreciation, and amortisation (EBITDA) up 47% to $36.2 million
Funds under administration (FUA) up 237% to $58.6 billion
A 5.5 cents per share fully franked final dividend, meaning the full-year dividend increased 43% to 10 cents per share.

Those impressive figures were enough to send the HUB24 share price soaring higher on Tuesday. In contrast, Netwealth shares finished the day only 0.78% higher following their rival’s strong results.

It’s something of a double whammy for Netwealth, after its share price slumped 5% following its own FY21 earnings update last Wednesday.

Here’s a quick summary of some of Netwealth’s key figures for FY2021:

Total income up 17% from FY2020 to $144.9 million
Platform revenue up 17% to $142 million
EBITDA up 19% to $79.3 million
Funds under administration (FUA) up 49.6% to $47.1 billion
9.5 cents per share fully franked final dividend, meaning a full-year dividend increase of 26.3% to 18.6 cents per share.

At first glance, Netwealth and HUB24’s earnings don’t look too dissimilar. However, it is a tale of two very different sets of expectations as HUB24 shares surged and Netwealth’s valuation slid lower.

Perhaps unsurprisingly, both company’s executives were keen to tout themselves as the leading investment advice platform in their respective releases.

HUB24 managing director Andrew Alcock had this to say after his company’s earnings result:

I am proud that HUB24 has been recognised as Australia’s Best Platform Overall with the highest level of adviser satisfaction.

Meanwhile, Netwealth’s joint managing directors Michael and Matthew Heine said:

We continue to gain industry recognition as the leading specialist advice platform provider.

Foolish takeaway

Both wealth management platform providers posted significant funds under administration growth throughout the year.

However, HUB24 earnings received a better response from investors with the company’s shares surging more than 8% today. They closed the day 7.43% higher at $27.90.

The post How does the HUB24 (ASX:HUB) earnings compare to Netwealth? appeared first on The Motley Fool Australia.

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More reading

Why HUB24, MNF, Nanosonics, & Uniti shares are surging higher

HUB24 (ASX:HUB) share price gains on 43% bump to dividend
Why the Netwealth (ASX:NWL) share price is up 9% on Thursday
Here are the top movers on the ASX 300 today

Why Bapcor, BHP, CSL, & Netwealth shares are tumbling today

Motley Fool contributor Ken Hall 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 Hub24 Ltd and Netwealth. The Motley Fool Australia owns shares of and has recommended Netwealth. The Motley Fool Australia has recommended Hub24 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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