Suncorp Group (SUN): Cult fave

No special dividend but don’t let it fool you SUN’s headline 2016 results were as follows: (1) cash NPAT $1,089m (BP $1,086m, consensus $1,138m); (2) cash EPS 85cps (BP 85cps, consensus 88cps); (3) final ordinary dividend 38cps fully franked (BP 35cps, consensus 37cps); (4) no special dividend (BP 5cps, consensus 2cps); (5) ROE 8.2% (BP 8.0%, consensus 8.4%); (6) GWP $9.0bn (BP $9.0bn, consensus $9.0bn); (7) reported insurance margin 9.9% (BP 9.3%, consensus 10.3%); (8) COR 91% (BP 93%); and (9) PCA coverage 1.7x (BP 1.7x, target 1.5x) and CET1 coverage 1.2x (BP 1.3x, target 1.1x). While cash NPAT decreased by 9% pcp to $1,089m mainly from higher residual claims and lower investment yields in 1H16, performance across all businesses improved in 2H16.