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McMillan Shakespeare Limited
Industrials · Staffing & Employment Services
Updated 13 hours ago
$14.96
MARKET CAP
$1.04B
P/E RATIO
12.6
DIV. YIELD
9.3%
FRANKING
100%
McMillan Shakespeare Limited provides salary packaging, novated leasing, disability plan management, support co-ordination, asset management, and related financial products and services in Australia and New Zealand.
View full descriptionThe Warsi Rating combines two proven approaches: value investing principles and dividend strategy. A stock must score 70+ on both to be rated Solid or higher.
$45.18
Discounted cash flow estimate
$18.26
For 6% dividend yield
Business quality and balance-sheet durability.
Profit generated per $1 of shareholder investment
Exceptional 35.4% ROE places this among elite companies. Strong competitive advantage evident.
Current Snapshot
10Y Avg
35.4%
Threshold
15.0%
Worst Year
22.2%
Why It Matters
ROE shows how effectively management turns shareholder capital into profit. High and stable ROE can signal pricing power, cost discipline, or both.
Formula
Net Income / Shareholders' Equity x 100Method
Use the 10-year average ROE and review the weakest year to check whether returns stayed resilient across cycles.
Worked Example
This company's 10-year average ROE is 35.4%, meaning each $1 of shareholder equity generates $0.35 in annual profit. The threshold is 15%, and the worst single year was 22.2%.
How to Interpret
Higher and steadier ROE generally supports stronger long-term compounding. Large drawdowns in weak years can point to fragility.
At 35.4% ROE, every $1 retained by this company generates $0.35 in annual profit. This exceptional compounding power is what drives long-term wealth - and for dividend investors, it often translates to sustainable dividend growth without needing to borrow or dilute shareholders.
Sources
Profit after production costs, before overhead
Short-term assets vs. short-term debts
How much the company owes vs. what it owns
Real cash left after running the business
Negative free cash flow means the company is consuming cash. May need to raise debt or equity to fund operations.
Current Snapshot
Current FCF
$-79M
Pass Rule
> $0
Status
Negative
Why It Matters
Free cash flow is the cash available after core operating and capital needs. It is central to dividend capacity.
Formula
Operating Cash Flow - Capital ExpendituresMethod
Review whether free cash flow is consistently positive and whether it is sufficient relative to dividends and debt needs.
Worked Example
This company generated $-79M in free cash flow — cash left after operating costs and capital expenditure. Negative FCF means the company is consuming more cash than it generates.
How to Interpret
Persistently negative free cash flow can force reliance on borrowing or equity issuance to maintain payouts.
Negative cash flow means dividends may require borrowing - an unsustainable situation. The company is spending more cash than it generates, which can't continue indefinitely.
Sources
Price versus estimated intrinsic value and required return thresholds.
What percentage of the stock price comes back as earnings each year
Consistency of profits over time
Is the business growing — and is debt being managed responsibly?
Debt growing with stable revenue — check whether new borrowing is productive or a warning sign for dividend sustainability.
Current Snapshot
Revenue Change
-4.2%
Debt Change
+119.5%
Trend State
Mixed
Why It Matters
Revenue trend shows whether the business is expanding or contracting. Debt trend adds context on whether growth is being funded conservatively.
Formula
Revenue Change (%) = (Latest Revenue - Earliest Revenue) / |Earliest Revenue| x 100; Debt Change (%) = (Latest Debt - Earliest Debt) / |Earliest Debt| x 100Method
Map annual revenue history and, where relevant, annual debt history. For financial companies, debt is excluded because deposits and reserves distort this signal.
Worked Example
Revenue changed by -4.2% across the displayed period, while debt changed by +119.5%.
How to Interpret
Rising revenue with stable or falling debt is typically stronger than rising revenue funded by rapidly rising leverage.
Debt growing with stable revenue — check whether new borrowing is productive or a warning sign for dividend sustainability.
Sources
Annual dividends as percentage of stock price
7.32% yield meets Barsi's 6% minimum. Based on 6-year average, not one-time spikes.
Current Snapshot
6Y Avg Yield
7.3%
6% Requirement
6.0%
Gross Yield
10.5%
Why It Matters
Yield translates dividend income into a percentage of the price paid, which is central to income-first screening.
Formula
Annual Dividends per Share / Stock Price x 100Method
Use the 6-year average annual dividend for consistency and compare the result with the 6% framework requirement.
Worked Example
With a 6-year average annual dividend of $1.10 and a share price of $14.96, the Barsi yield is 7.3%. The minimum requirement is 6%. Including franking credits, the gross yield is 10.5%.
How to Interpret
Higher sustainable yield improves upfront income, but unusually high yields may reflect elevated risk or weak coverage.
This yield provides meaningful income that can beat inflation and compound over time. With DRIP enabled, this income can snowball into significant wealth.
Sources
Track record of consistent dividend payments
| Ex-Date | Pay Date | Gross | Franking | Net | Credit |
|---|---|---|---|---|---|
| ~11 Sept 2026Est | ~28 Sept 2026 | ~$0.85 | 100% | ~$0.60 | $0.26 |
| ~15 Mar 2027Est | ~30 Mar 2027 | ~$0.71 | 100% | ~$0.50 | $0.21 |
Highest price to lock in 6% yield
Industry category of the business
Industrials is not a BESST sector. Non-BESST stocks receive a lower base score but can still qualify with exceptional dividend metrics.
Current Snapshot
Industry
Staffing & Employment Services
BESST Match
No
Score Impact
No bonus
Why It Matters
Sector classification helps contextualise risk and demand durability, which can materially affect dividend stability.
Formula
BESST Match = Sector in {Banks, Energy, Sanitation, Insurance, Telecom}Method
Match company sector or industry against BESST categories. A match adds scoring support but does not replace core dividend checks.
Worked Example
This company operates in Staffing & Employment Services (Industrials sector). It does not match a BESST sector, so it receives the standard base score. Non-BESST stocks can still qualify with strong dividend metrics.
How to Interpret
Sources
How much of a company's earnings are paid out as dividends
The company is paying out more in dividends than it earns (103%). This is unsustainable long-term and often signals a dividend cut ahead. An inflated payout also distorts the price ceiling calculation used in our analysis.
Current Snapshot
Latest Ratio
103.0%
Healthy Range
30%-75%
Zone
Unsustainable
Why It Matters
Payout ratio links dividends to earnings capacity and helps evaluate whether current distributions are likely to remain supportable.
Formula
Payout Ratio (%) = (Annual Dividend per Share / Earnings per Share) x 100Method
Calculate year-by-year payout ratios where EPS is positive, classify each year by sustainability zone, and compare with the current TTM ratio.
Worked Example
$1.48 dividend / $1.36 EPS equals 108.7% payout ratio.
How to Interpret
Ratios in the middle range are usually more sustainable than very high ratios. Values above 100% indicate dividends exceeded earnings in that period.
The company is paying out more in dividends than it earns (103%). This is unsustainable long-term and often signals a dividend cut ahead. An inflated payout also distorts the price ceiling calculation used in our analysis.
Sources
10-year ROE trends, dividend history, price ceiling calculations, and every red flag explained.
See the Full BreakdownFree. No card. 10 seconds.
Exceptional 100.0% margins indicate strong pricing power and brand value.
Current Snapshot
10Y Avg
100.0%
Threshold
40%
Worst Year
100.0%
Why It Matters
Gross margin indicates how much room a business has to absorb costs and still generate profit.
Formula
(Revenue - Cost of Goods Sold) / Revenue x 100Method
Assess both the long-term average and the weakest year. The framework checks for both level and consistency.
Worked Example
This company's 10-year average gross margin is 100.0% — it keeps 100 cents of every revenue dollar after production costs. The threshold is 40%, and the weakest year was 100.0%.
How to Interpret
Sustained high margins usually support durability. Sharp margin swings can signal weaker control or cyclical pressure.
Exceptional margins mean the company has strong pricing power - customers pay premium prices even when cheaper alternatives exist. This buffer protects profits (and dividends) even if costs rise.
Sources
Current ratio of 1.05 is below ideal 1.5. Adequate but limited cushion for unexpected expenses.
Current Snapshot
Current Ratio
1.05x
Warning Floor
1.00x
Target
1.50x
Why It Matters
Liquidity supports operational stability. Companies with weak liquidity can face pressure even when long-term fundamentals are sound.
Formula
Current Assets / Current LiabilitiesMethod
Compare the current ratio to the warning floor and target level used in the framework.
Worked Example
This company's current ratio is 1.05x — it has $1.05 in short-term assets for every $1 of short-term liabilities. The target is 1.5x, with a warning floor at 1.0x.
How to Interpret
Ratios above the target suggest healthier short-term resilience; ratios below 1.0x can indicate immediate funding risk.
Limited liquidity increases the risk of dividend cuts if cash flow becomes stressed during a downturn. There's less buffer to absorb surprises.
Sources
Debt-to-equity of 6.72 is 6.7x over Buffett's limit. High leverage increases risk during downturns.
Current Snapshot
Current D/E
6.72x
Industry Limit
1.00x
Headroom
-5.72x
Why It Matters
Debt-to-equity shows balance-sheet risk. Lower leverage usually means more flexibility when earnings soften.
Formula
Total Debt / Shareholders' EquityMethod
Compare current D/E against the industry threshold used in the scoring framework, then assess remaining headroom.
Worked Example
This company's D/E is 6.72, meaning it carries 672 cents of debt for every $1 of equity. The industrials & services limit is 1.00, leaving it 5.72 over the limit.
How to Interpret
Lower values generally imply lower refinancing pressure and lower dividend stress in downturns.
High debt means interest payments come before dividends. During recessions, heavily indebted companies often cut dividends first to preserve cash. This adds risk to your income stream.
Sources
8.0% earnings yield exceeds the 7.5% threshold, meaning you're well compensated for owning shares instead of bonds.
Current Snapshot
Current Yield
8.0%
Required Yield
7.5%
Spread
+0.5pp
Why It Matters
Earnings yield reframes valuation as return on price paid. It helps compare equity earnings power against lower-risk alternatives.
Formula
(Earnings per Share / Stock Price) x 100Method
Calculate current earnings yield, then compare it to the required yield for the stock's industry setting.
Worked Example
With EPS of $1.19 and a share price of $14.96, earnings yield is 8.0%. The required yield for this industry is 7.5% (based on 4.5% government bond rate plus a risk premium).
How to Interpret
A yield above the required level suggests better valuation support; below it indicates thinner compensation for equity risk.
You're getting a fair return for the risk of owning shares instead of safe bonds. The earnings power justifies the price you're paying.
Sources
How current price compares with estimated intrinsic value
Exceptional discount: 53% BELOW the fair-value threshold (includes 30% margin of safety).
Current Snapshot
Current Margin
66.9%
Industry Threshold
30%
Status
53% Undervalued
Why It Matters
Margin of safety provides a valuation buffer against modelling uncertainty and adverse business outcomes.
Formula
(Estimated Intrinsic Value per Share - Current Price) / Estimated Intrinsic Value per Share x 100Method
Estimate intrinsic value using a two-stage DCF (10-year projection plus terminal value), then compare with current price.
Worked Example
For this stock now: intrinsic value is $45.18 per share, current price is $14.96, and margin of safety is 66.9%.
How to Interpret
Positive margin indicates price below modelled value; negative margin indicates price above modelled value. Compare against the industry's required buffer.
The market price sits far below your required entry threshold, providing a substantial valuation buffer if assumptions prove optimistic.
Sources
10/10 positive EPS years demonstrates highly predictable earnings through multiple economic cycles.
Current Snapshot
Positive Years
10/10
Allowed Losses
1
EPS CAGR
3.6%
Why It Matters
Consistency in EPS helps distinguish resilient earnings power from one-off performance spikes.
Formula
Positive EPS Years / Available EPS YearsMethod
For 8+ years of data, apply industry-specific loss tolerance. For limited data, every available year must be positive.
Worked Example
This company reported positive earnings in 10 of the last 10 years. The allowed loss tolerance for this industry is 1 year. EPS growth rate (CAGR) is 3.6%.
How to Interpret
Fewer loss years and stronger EPS continuity generally improve confidence in future dividend and valuation assumptions.
A perfect track record through multiple economic cycles means this company generates profits in good times and bad. Your dividend has a solid foundation.
Sources
How much earnings are consumed by capital expenditure
Capital-efficient. 24% of earnings consumed by CapEx leaves plenty for shareholders.
Current Snapshot
10Y CapEx Intensity
24%
Threshold
50%
Buffer
+26%
Why It Matters
CapEx intensity estimates how much of earnings must be reinvested just to sustain operations.
Formula
Cumulative CapEx (10yr) / Cumulative Net Income (10yr) x 100Method
Aggregate 10-year CapEx and net income, then compare the ratio with the sector threshold in the framework.
Worked Example
Over 10 years, 24% of this company's cumulative earnings were consumed by capital expenditure. The industrials & services threshold is 50%, leaving a buffer of +26%.
How to Interpret
Lower ratios usually indicate better cash conversion. Higher ratios can reduce room for dividends and buybacks.
Low capital needs mean the business retains most of its earnings as real cash. This supports sustainable dividend payments and growth without needing to borrow.
Sources
Percentage of revenue that becomes profit after all expenses
Strong 21.9% net margin — well above the 8% threshold for this sector.
Current Snapshot
Current Margin
21.9%
Threshold
8.0%
Relative Position
+13.9%
Why It Matters
Net income margin shows how much profit the business keeps from each dollar of revenue after all costs.
Formula
Net Income / Total Revenue x 100Method
Compare current margin with the industry-specific threshold to avoid cross-sector distortions.
Worked Example
This company's net income margin is 21.9% — it keeps 22 cents of every revenue dollar as profit after all expenses. The industrials & services threshold is 8%, putting it 13.9% above the requirement.
How to Interpret
Margins that are both strong and stable can indicate competitive strength; persistent weakness may limit reinvestment and payout capacity.
High margins provide a comfortable buffer against rising costs or temporary revenue drops. Dividends are well-supported by consistent profitability.
Sources
How efficiently the company turns money into profit
4.8% ROIC is below the 11.0% threshold. Company may not be earning enough to justify the money invested in it.
Current Snapshot
5Y Avg
4.8%
Threshold
11.0%
WACC Delta
-4.2pp
Why It Matters
ROIC measures capital efficiency. Businesses that repeatedly earn above their funding cost can compound value more effectively.
Formula
After-Tax Operating Profit / Invested Capital x 100Method
Use the 5-year average ROIC and compare it with industry WACC plus the required spread in this framework.
Worked Example
This company's 5-year average ROIC is 4.8%, with a cost of capital (WACC) of 9.0%. The -4.2pp gap below WACC suggests it may be destroying value on each dollar invested.
How to Interpret
A healthy spread above WACC suggests value creation; a narrow or negative spread points to weaker capital efficiency.
Returns below the cost of borrowing mean the business destroys value over time. This can erode the foundation that supports dividends — proceed with caution.
Sources
Years of earnings needed to retire all long-term debt
Would take 9.1 years of earnings to pay off long-term debt — above the 5-year threshold. Heavy debt relative to earnings.
Current Snapshot
Payoff Years
9.1yr
Target Years
5yr
Gap
-4.1yr
Why It Matters
Debt payoff years converts leverage into an intuitive time measure, making debt burden easier to compare across stocks.
Formula
Long-Term Debt / Average Net Income (3yr)Method
Use current long-term debt and the 3-year average net income to smooth one-off profit noise.
Worked Example
With $642M in long-term debt and $70M in average annual earnings (3yr), it would take 9.1 years of earnings to pay off all debt. The industrials & services threshold is 5 years.
How to Interpret
Lower values generally indicate stronger debt capacity. Very high values can constrain dividend resilience.
High debt relative to earnings means interest payments compete with dividends for available cash. If earnings dip, the dividend is at risk because debt must be serviced first.
Sources
| Ex-Date | Pay Date | Gross | Franking | Net | Credit |
|---|---|---|---|---|---|
| 12 Mar 2026Interim | 27 Mar 2026 | $0.89 | 100% | $0.62 | $0.27 |
| 11 Sept 2025Final | 26 Sept 2025 | $1.10 | 100% | $0.77 | $0.33 |
| 13 Mar 2025Interim | 28 Mar 2025 | $1.01 | 100% | $0.71 | $0.30 |
| 12 Sept 2024Final | 17 Oct 2024 | $1.11 | 100% | $0.78 | $0.33 |
| 7 Mar 2024Interim | 22 Mar 2024 | $1.09 | 100% | $0.76 | $0.33 |
| 7 Sept 2023Final | 22 Sept 2023 | $0.94 | 100% | $0.66 | $0.28 |
| 9 Mar 2023Interim | 24 Mar 2023 | $0.83 | 100% | $0.58 | $0.25 |
| 26 Oct 2022Final | 10 Nov 2022 | $1.06 | 100% | $0.74 | $0.32 |
| 10 Mar 2022Interim | 25 Mar 2022 | $0.49 | 100% | $0.34 | $0.15 |
| 9 Sept 2021Final | 24 Sept 2021 | $0.44 | 100% | $0.31 | $0.13 |
Excellent track record. 11 years of consistent dividends through multiple market cycles.
Current Snapshot
History
11yr
Predictability
Variable
Payout Health
One-off event
Why It Matters
Payment consistency is a direct test of dividend reliability. Large cuts or skips often appear before confidence recovers.
Formula
Consecutive Years = count of years with dividend payments and no disqualifying skip/cut eventsMethod
Require at least 6 years of history, then check for skipped years and large cuts, allowing approved systemic-event exceptions.
Worked Example
This company has 11 years of dividend history (2016–2026). No suspensions detected — 11 consecutive years of payments. Predictability: Variable. Payout health: One-off event. The minimum requirement is 6 years.
How to Interpret
Longer uninterrupted records generally signal stronger income reliability than high yield alone.
A 11-year track record through multiple economic cycles gives confidence your income will continue. This company has proven it prioritises shareholder returns.
Sources
Current price is favourable. Locks in 6%+ dividend yield based on historical average.
Current Snapshot
Current Price
$14.96
Max Buy Price
$18.26
Delta
+18.1%
Why It Matters
The price ceiling links valuation discipline to income targets by defining the price that aligns with a 6% yield target.
Formula
6-Year Average Annual Dividend / 0.06Method
Use the 6-year average dividend (not one year) and divide by 0.06 to estimate the maximum entry price for target yield.
Worked Example
With a current price of $14.96 and a ceiling of $18.26, the entry is 18.1% below the ceiling.
How to Interpret
Prices below the ceiling imply a historical yield above 6%; prices above it imply a lower historical yield at entry.
Buying below the ceiling locks in your target yield based on proven historical dividends — not projections. Your income is secured at this price.
Sources
BESST alignment is a positive context signal. Non-BESST stocks can still qualify with strong yield and dividend consistency.
Non-essential businesses face demand drops during recessions — discretionary spending is first to be cut. This increases cyclical risk for dividends, but companies with decades of consistent payments can still demonstrate durability.