One FTSE 250 stock that caught my eye recently is Just Group (LSE: JUST).
The shares have been on a good run, and the business just released excellent results too.
Let me explain why I’d love to buy some of the shares when I next have some spare cash to invest.
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Planning for the future?
Just Group is a financial services business operating in the retirement planning area. For those of us planning for our golden years, it provides a multitude of products and services.
I was initially drawn to the stock when I noticed how well the shares were doing. They’re up a whopping 67% over a 12-month period. At this time last year, they were trading for 82p, compared to current levels of 137p.
The good stuff
I saw that Just Group released an interim report for the six months ended 30 June 2024 a couple of days ago. It made for excellent reading, in my view. The main takeaways for me were that underlying profit and retirement income sales increased by 44% and 30%.
Next, the business confirmed that return on equity improved by over 15%. More tellingly for me, tangible net assets per share came in at 240p per share. This tells me the shares look cheap, and there’s a level of protection, based on their current level.
Despite the share price flying, the shares still look dirt-cheap to me on a price-to-earnings ratio of just over four.
Finally, the business increased its interim dividend by 20%. The dividend hike is a positive sign, and perhaps an indicator of things to come as the firm grows performance and earnings. At present, a dividend yield of 1.6% is respectable. However, I do understand that dividends are never guaranteed.
Casting an eye to the future, the demand for retirement products is only set to increase. This is linked to the ageing population in the UK, threats of a higher state pension age, and other economic worries. I for one am constantly thinking about my retirement plans from a financial view.
The business also said in its update that it is on track to continue delivering stellar results. However, I always take these statements and forecasts with a pinch of salt, as they don’t always come to fruition.
Risks and final thoughts
From a bearish view, Just Group is by no means a big fish in its respective pond. Competition for new business from big boys such as Aviva and Legal & General could dent future growth, as well as earnings and returns.
Furthermore, continued economic issues could hurt demand for retirement products. Many consumers are battling with higher living costs here and now, rather than being able to invest in their future. This could hurt earnings and returns, and I’ll need to keep an eye on performance.
Overall, I reckon Just Group shares look like a fantastic opportunity for me right now. This is based on recent results, a burgeoning sector primed for growth, an enticing valuation, and a growing passive income opportunity.
