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Pepper Money Limited
Financial Services · Credit Services
Updated 5 hours ago
$1.72
MARKET CAP
$772.66M
P/E RATIO
7.6
DIV. YIELD
7.8%
FRANKING
100%
Pepper Money Limited operates as a non-bank lender in the mortgage and asset finance markets in Australia and New Zealand. It operates through three segments: Mortgages, Asset Finance, and Loan and Other Servicing.
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.
$5.06
Discounted cash flow estimate
Business quality and balance-sheet durability.
Profit generated per $1 of shareholder investment
20.8% ROE meets the threshold. Some years dipped but overall pattern is acceptable. Note: COVID-19 Pandemic year(s) excluded — ROE recovered to 168% of target.
Current Snapshot
10Y Avg
20.8%
Threshold
12.0%
Worst Year
11.6%
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 20.8%, meaning each $1 of shareholder equity generates $0.21 in annual profit. The threshold is 12%, and the worst single year was 11.6%.
How to Interpret
Higher and steadier ROE generally supports stronger long-term compounding. Large drawdowns in weak years can point to fragility.
At 20.8% ROE, every $1 retained generates $0.21 in annual profit. This is solid compounding power that can support dividend growth over time.
Sources
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
$-721M
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 $-721M 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 or shrinking over time?
Revenue has been largely flat over 5 years. For a mature financial institution, look at ROE and dividend consistency for a clearer picture.
Current Snapshot
Revenue Change
+1.1%
Debt Change
N/A (financials)
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 +1.1% across the displayed period.
How to Interpret
Rising revenue with stable or falling debt is typically stronger than rising revenue funded by rapidly rising leverage.
Revenue has been largely flat over 5 years. For a mature financial institution, look at ROE and dividend consistency for a clearer picture.
Sources
Annual dividends as percentage of stock price
Pepper Money Limited operates as a non-bank lender in the mortgage and asset finance markets in Australia and New Zealand. It operates through three segments: Mortgages, Asset Finance, and Loan and Other Servicing. The Mortgages segment engages in the financing for residential home loans, small balance commercial real estate loans, and self-managed super fund mortgages. The Asset Finance segment finances a range of asset types for consumer and commercial customers.
The Loan and Other Servicing segment provides independent loan servicing for mortgages, and asset finance and personal loans. It also offers auto and equipment finance, novated leases, and third-party loan services. The company was formerly known as Pepper Group Pty Limited. The company was incorporated in 2000 and is based in North Sydney, Australia.
Pepper Money Limited is a subsidiary of Pepper Group Anz Holdco Limited.
Who owns the company's shares and how much leadership has at stake
When leaders own 20%+, they win when you win and lose when you lose
A handful of professional investors are watching
Shares freely traded on the ASX by individual investors like you
The people running this company own a large chunk of it (62.5%). When leadership has their own money on the line, they tend to make decisions that benefit all shareholders — not just their salary. Professional fund managers also hold shares, which is a vote of confidence in the business.
Current Snapshot
Insider %
62.5%
Institutional %
22.3%
Float %
15.3%
Why It Matters
Ownership mix affects governance incentives, liquidity, and share-price behaviour under large portfolio rebalancing flows.
Formula
Public Float (%) = 100 - Insider Ownership (%) - Institutional Ownership (%)Method
Use reported ownership percentages, convert to percentage terms, and compute remaining public float as the residual.
Worked Example
If insiders own 62.5% and institutions own 22.3%, public float is 15.3%.
How to Interpret
Higher insider ownership can improve alignment of incentives, while dominant institutional concentration can amplify short-term price moves.
The people running this company own a large chunk of it (62.5%). When leadership has their own money on the line, they tend to make decisions that benefit all shareholders — not just their salary. Professional fund managers also hold shares, which is a vote of confidence in the business.
Sources
| Date | Insider | Type | Shares | Value |
|---|---|---|---|---|
| 9 Mar 2026 | Rehayem (Mario) Chief Executive Officer | Unknown | 937K | — |
| 31 Dec 2025 | McGrath (Therese) Chief Financial Officer | Unknown | 546K | — |
| 9 Apr 2025 | O'Shea (Des) Director (Non-Executive) | Purchase at price 0.81 per share. | 15K | $12K |
Company insiders have been net buyers of shares over the past 12 months. This may indicate management confidence in future prospects.
Both value and dividend analyses may be affected by missing data.
Market data sourced from third-party financial data providers. Analysis generated using Warsi Criteria — proprietary scoring algorithms for value investing and dividend income analysis. Not financial advice. Learn how we analyse stocks →
Strong value. 13.2% earnings yield exceeds the threshold, and multiple valuation checks confirm it's attractively priced.
Current Snapshot
Current Yield
13.2%
Required Yield
7.5%
Spread
+5.7pp
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 $0.23 and a share price of $1.72, earnings yield is 13.2%. 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.
Multiple ways of measuring value agree: you're getting a fair deal. The stock offers solid returns compared to what you'd earn from safe bonds.
Sources
How current price compares with estimated intrinsic value
Exceptional discount: 51% BELOW the fair-value threshold (includes 30% margin of safety).
Current Snapshot
Current Margin
66.0%
Industry Threshold
30%
Status
51% 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 $5.06 per share, current price is $1.72, and margin of safety is 66.0%.
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
Only 5/6 positive EPS years. Buffett requires predictable earnings he can forecast 5-10 years out.
Current Snapshot
Positive Years
5/6
Allowed Losses
0 (limited)
EPS CAGR
-28.4%
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 5 of the last 6 years. With only 6 years of data, every year must be positive. EPS growth rate (CAGR) is -28.4%.
How to Interpret
Fewer loss years and stronger EPS continuity generally improve confidence in future dividend and valuation assumptions.
Volatile earnings create dividend uncertainty. When profits disappear, dividends often follow. Forecasting your future income becomes difficult.
Sources
Insufficient dividend history. Barsi methodology requires 6 years of data to calculate average yield.
Current Snapshot
6Y Avg Yield
N/A
6% Requirement
6.0%
Gross Yield
N/A
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
If annual dividends are $0.60 and the share price is $10, dividend yield is 6.0%.
How to Interpret
Higher sustainable yield improves upfront income, but unusually high yields may reflect elevated risk or weak coverage.
Without 6 years of dividend history, we can't assess whether the yield is sustainable or a one-time spike. More data is needed to evaluate income potential.
Sources
Track record of consistent dividend payments
| Ex-Date | Pay Date | Gross | Franking | Net | Credit |
|---|---|---|---|---|---|
| 12 Mar 2026Interim | 14 Apr 2026 | $0.11 | 100% | $0.08 | $0.03 |
| Ex-Date | Pay Date | Gross | Franking | Net | Credit |
|---|---|---|---|---|---|
| 11 Sept 2025Final | 10 Oct 2025 | $0.09 | 100% | $0.06 | $0.03 |
| 10 June 2025Special | 15 July 2025 | $0.18 | 100% | $0.13 | $0.05 |
| 19 Mar 2025Interim | 23 Apr 2025 | $0.10 | 100% | $0.07 | $0.03 |
| 11 Sept 2024Final | 16 Oct 2024 | $0.07 | 100% | $0.05 | $0.02 |
| 13 Mar 2024Interim | 17 Apr 2024 | $0.07 | 100% | $0.05 | $0.02 |
| 11 Sept 2023Final | 16 Oct 2023 | $0.05 | 100% | $0.04 | $0.01 |
| 13 Mar 2023Interim | 17 Apr 2023 | $0.07 | 100% | $0.05 | $0.02 |
| 14 Sept 2022Final | 19 Oct 2022 | $0.08 | 100% | $0.05 | $0.02 |
| 14 Mar 2022Interim | 18 Apr 2022 | $0.13 | 100% | $0.09 | $0.04 |
Only 5 years of dividend history available. Barsi methodology requires 6+ years to evaluate consistency.
Current Snapshot
History
5yr
Predictability
N/A
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 5 years of dividend history (2022–2026). No suspensions detected — 5 consecutive years of payments. Predictability: N/A. 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.
Without 6 years of history, we can't verify this company maintained dividends through economic cycles. Longer track records provide confidence your income will continue.
Sources
Industry category of the business
Financial Services is not a BESST sector. Non-BESST stocks receive a lower base score but can still qualify with exceptional dividend metrics.
Current Snapshot
Industry
Credit 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 Credit Services (Financial Services 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
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.
Sources
How much of a company's earnings are paid out as dividends
A 60% payout is in the sustainable range (30–75%) — the company balances rewarding shareholders with reinvesting for growth. This gives the price ceiling calculation a stable base, which is a healthy sign for long-term dividend investors.
Current Snapshot
Latest Ratio
59.7%
Healthy Range
30%-75%
Zone
Healthy
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
$0.26 dividend / $0.23 EPS equals 114.9% 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.
A 60% payout is in the sustainable range (30–75%) — the company balances rewarding shareholders with reinvesting for growth. This gives the price ceiling calculation a stable base, which is a healthy sign for long-term dividend investors.
Sources
Credit Corp Group Limited
Liberty Financial Group Limited
Humm Group Limited
Solvar Limited
FSA Group Limited
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